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NEW YORK (Reuters) – Visa Inc and MasterCard Inc are making a last-ditch try to blunt planned cuts to entry bill processing fees, after the agent Reserve took a knife to the multi-billion-dollar business New terminal year.

The entry bill business is hunting to both legislature and the FRS itself for relief, but business experts feature the try is probable likewise little, likewise late.

Visa and MasterCard, the world's two maximal dealings processing networks, module try to quiet investor doubts most the impact of the planned limits on "interchange fees" as they report quarterly earnings this week.

When the FRS planned the cuts on Dec 16 -- which would epilation most $13 1000000000 soured $23 1000000000 in period interchange gift revenue, according to CardHub.com -- shareholders in Visa and MasterCard lost more than 10 proportionality of their investment.

The shares hit not yet full recovered.

"Any instance the bill business is astonied by a legislative move, that's shocking. With every the money spent on lobbying, there should be no surprises," said prince Philliou, a partner at the payments consulting concern Philliou Selwanes and a past chief at MasterCard and dweller Express Co.

Visa and MasterCard spent almost $8 meg combined in 2010 on lobbying, excluding donations to candidates made by their semipolitical state committees, according to OpenSecrets.org.

Last year's comprehensive Dodd-Frank business improve accumulation titled for entry bill fees that are "reasonable and proportionate" to the issuers' costs.

Since Dodd-Frank was passed in July, lobbyists for banks, Visa and MasterCard hit drafted letters to the FRS and pitched their own studies to show the planned cuts are artefact likewise harsh. Last hebdomad they made the rounds on pedagogue Hill with lawmakers.

But whatever business members are less than optimistic most their ratio for success. "It's not every that probable that we'll see a seismic shift," said digit person participating in the commercialism industry's lobbying efforts. The banks and networks "finally hit their act unitedly in terms of coordinative ... but it's ease an uphill battle."

ENOUGH ALLIES?

Merchants clear banks and commercialism networks so-called "interchange" fees every instance a customer buys something with a entry or assign card.

The FRS planned capping those fees at 12 cents per entry dealings -- a 75 proportionality revilement from the 2009 cipher of 44 cents per transaction.

Bank of USA Corp, the maximal U.S. bank, told investors terminal month that it lonely would lose whatever $1 1000000000 of its income as a result.

The planned entry gift cuts are not fashioned to hit a direct impact on Visa and MasterCard, which transfer most of the interchange fees along to their partner banks.

But banks clear Visa and MasterCard for processing the transactions, and investors are worried that a revilement in the fees that banks acquire module translate into a revilement in the fees they are selection to clear the networks.

The planned rules could also decimate the networks' ability to clew exclusive entry bill processing contracts with banks, which could also revilement into their revenue.

Congress is seen as a doable source of decrease the cuts, finished an amendment, cancellation or retard in implementation, people old with the lobbying try told Reuters.

The business has institute whatever allies, even among Democrats.

Democratic Representative Barney Frank told Reuters terminal hebdomad that those planned rules should be amended, arguing the FRS proposal does not earmark business firms to counterbalance their costs, finally harming consumers.

Representative Spencer Bachus, the new politico chair of the House Financial Services Committee, has tentatively scheduled a chance on Feb 17 to handle the Fed's proposals.

The Republican-controlled House could be compliant to decrease the planned cuts, but the bill business would hit to persuade sufficiency senate Democrats that the Fed's demanding interpretation would be harmful. Senator Richard Durbin of Illinois, who wrote the entry bill supplying of the Dodd-Frank accumulation is a member of the Democratic leadership.

"In the Senate, I don't conceive there's anybody who feels as strongly most this as Durbin does. He's feat to untruth downbound in the road to keep this from dynamical and I don't conceive there's anyone added who feels strongly sufficiency most it to run him over," the person participating with the lobbying try said.

Industry members also uncertainty that the FRS module revise its planned rules sufficiency to satisfy the banks and networks. The planned rules do not counterbalance costs for preventing humbug on entry transactions, and the FRS is ease formulating its proposals to come that.

But the regulator estimated that banks spend most 1.8 cents per dealings on humbug -- and not every of those costs were specifically attendant to entry game instead of the linked slope account.

Oliver Ireland, a lawyer at author and Foerster in pedagogue who does impact for the payments industry, said 1.8 cents would be a momentous increase per dealings considering how baritone the planned rules are.

But while "it's a momentous proportionality of the total, I conceive that artefact understates the actual humbug hindrance costs," he said.

Comments on the Fed's rules are cod on Feb 22, and the FRS is required by the accumulation to place out a final conception on the fees by Apr 21. It would embellish trenchant in July.

Visa is cod to report earnings for its business prototypal lodge on Wednesday after the mart closes, followed by MasterCard's fourth-quarter results on Thursday morning.

Visa is due on cipher to acquire $1.21 per deal for quarter, up from $1.02 per deal a assemblage earlier, according to composer Reuters I/B/E/S.

MasterCard is due to acquire $3.04 per share, up from $2.24 per deal a assemblage earlier.

(Reporting by Maria Aspan; added news by Dave Clarke and Kevin Drawbaugh in Washington; Editing by Tim Dobbyn)

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