Visa Inc (V), Mastercard Inc (MA): The Debit Card Kingdom May Be Crumbling

The court ruling in no way harms America Express. The company possesses zero exposure to the debit card market, and the ruling does not affect its credit card operations. However, American Express Company (NYSE:AXP) was driven lower with the rest of the industry,  potentially presenting a buying opportunity for investors looking to position in the company.

Looking Towards Tomorrow

The court ruling is substantial. Debit card fees could be cut in half, which could cost Visa and Mastercard Inc (NYSE:MA) millions. However, the Fed is very likely to appeal, and even if it doesn’t, the process of forming the new rules and implementing them will likely be long and strenuous.

When and if fees are cut, Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V) stand to lose the most. Still, overall transactions growth and the introduction of new fees will likely offset a good chunk of that lost revenue.

Investors should track the progress of the new rules and any potential Fed appeal, in addition to any reaction by Mastercard and Visa Inc (NYSE:V) to the decision.

American Express Company (NYSE:AXP) has no exposure to the debit card market, and thus was unfairly sent tumbling on the day of the decision. This unfounded drop could present a buying opportunity for investors looking to invest in the company.

As an overall investment, Mastercard Inc (NYSE:MA) appears to be the most attractive company, as its mix of high volume growth and healthy market share in both the debit and credit markets should position the company to prosper into the future.

All in all, even as debit card fees are likely to be cut within the next couple of years, Mastercard and Visa Inc (NYSE:V) should be able to whether the storm, and sustain massive profits for years to come.

The article The Debit Card Kingdom May Be Crumbling originally appeared on Fool.com and is written by Ryan Guenette.

Ryan Guenette has no position in any stocks mentioned. The Motley Fool recommends American Express, MasterCard, and Visa. The Motley Fool owns shares of MasterCard. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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