Interchange Income Drops Significantly for Banks

Stagnant spending is not only slowing the overall economic picture but it is also cutting a big revenue driver for banks; interchange fees have dropped significantly and some of that money will not come back when the lockdowns ease; “Though there will be pent-up demand among consumers, there will be some lost interchange revenue,” Jim Ryan, Chairman and CEO of Old National Bancorp, explained to American Banker. “I usually get a haircut every three weeks. I won’t make up for the one or two haircuts that I missed.”; interchange accounts for about 30 percent of the $2.3tn in global payments revenue; while some activity will start to come back as states begin to lessen restrictions, there is a thinking within banks that interchange will continue take a hit through the rest of 2020; “you’ll see the impact of interchange and slower economic activity there, as people are out doing less things and drawing on their accounts less often,” Darren King, CFO of M&T Bank, tells American Banker. American Banker

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