How a bank-owned debit network upends payment processing

Major banks like JPMorgan Chase and Wells Fargo are looking to buy the Star debit network. This move could fundamentally change how you pay for payment processing at your business. Right now, most debit transactions run through networks controlled by Visa or Mastercard. By owning their own network, banks want to bypass these giants. For a retailer, this could eventually lead to lower transaction fees for debit and Buy Now, Pay Later (BNPL) payments linked to bank accounts. The deal is driven by the rise of 'pay-by-bank' technology and AI-driven routing. Banks want to control the 'pipes' that move money so they can offer faster, cheaper alternatives to traditional credit card rails. If successful, this shift could give merchants more leverage when negotiating processing rates. It also signals a future where bank-direct payments become a more prominent option at the point of sale, potentially reducing the merchant's reliance on high-cost credit card transactions. While this is an infrastructure play, the end result is a more competitive landscape for the fees you pay on every sale.

Source: American Banker — Top News

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