By Ray Birch
NEW YORK— The reported interest by several of the nation's largest banks in acquiring Fiserv's debit card network has largely been viewed as another chapter in the long-running battle over interchange fees and the Durbin Amendment.
But Larry Pruss, managing director of emerging payment technologies at SRM, believes the bigger story may be what a sale would say about where one of the payments industry's largest technology companies thinks money itself is headed.
Fiserv has reportedly held discussions with JPMorgan Chase, Bank of America and other large financial institutions regarding the possible sale of its STAR and Accel debit networks. And new reports indicate the company may be moving in that direction.
Reuters and The Wall Street Journal reported that ownership of a debit network could allow large banks to avoid federal debit interchange caps under the Durbin Amendment, potentially unlocking billions of dollars in additional revenue while giving issuers more flexibility around rewards programs.
Pruss doesn't dispute that rationale. But he suspects the more important question isn't why banks might want to buy a debit network—it's why Fiserv might be willing to sell one.
"I think it comes down less to why the big banks might want Fiserv's debit business, because I think those reasons are fairly obvious," Pruss said. "The more interesting question is why Fiserv would want to get rid of it."
His answer centers on stablecoins.
Over the past year, Fiserv has aggressively expanded its digital asset strategy, announcing partnerships with Circle, launching its own FIUSD stablecoin initiative and investing in blockchain payment infrastructure. Those moves, Pruss believes, suggest the company may be positioning itself for a future in which payment volume increasingly moves over blockchain-based rails instead of traditional debit networks.
"I think they're asking two questions," he said. "The first is, 'Will stablecoins eventually reduce debit transaction volume?' Based on the investments they've been making, I think they believe the answer is yes."
If that proves true, Pruss said, the economics of owning a debit network begin to change.
"If you make money running a debit network, but you think transaction volume is eventually going to migrate somewhere else, why wouldn't you sell that network while it's still valuable?" he said. "I think that's one piece of what's happening."
The second question, he added, may be even more important.
"They're probably asking whether they can make more money by enabling stablecoins than simply operating debit switches," Pruss said. "Today they earn switch fees and processing revenue. But if stablecoins become an important payment rail, they may see a larger opportunity providing the infrastructure behind those transactions than continuing to operate traditional debit networks."
Broader Shift
That distinction, he said, reflects a broader shift occurring across the payments industry.
Mastercard, Visa, major banks and fintech companies have all announced initiatives involving stablecoins, tokenized deposits or blockchain-based settlement. While consumer adoption remains limited, Pruss believes the industry's investment levels indicate many large players are positioning themselves in case payment behavior changes over the next decade.
"I think this is less about saying debit is obsolete and more about making a long-term bet on the digitization of money," he said.
Pruss also believes the implications extend well beyond payments and could eventually reshape another foundational part of banking technology: core processing.
Today's financial institutions each maintain their own core processing systems and separate ledgers. Moving money between institutions requires messaging systems, reconciliation and settlement because every institution maintains its own records independently.
Blockchain-based systems operate differently.
"Every bank or credit union today has its own core," Pruss explained. "Those cores are all independent ledgers. Whenever money moves from one institution to another, there's messaging, liability shifts and reconciliation because everyone has their own ledger."
Shared ledger technology changes that equation.
"If you move into a world where money becomes digitized and transactions happen on shared ledgers, you start asking whether even the traditional core business gets impacted," he said. "That's another reason why Fiserv might be making investments around the digitization of money."
Common Infrastructure
That thinking aligns with broader industry initiatives, including work by the Bank for International Settlements on a Unified Ledger and the Regulated Liability Network concept explored by major global banks. Rather than every institution maintaining isolated records, those models envision regulated financial institutions operating on common infrastructure while retaining control over their own assets and customer relationships.
For credit unions, however, Pruss said the implications are more practical than theoretical.
He does not expect debit card volume to disappear overnight, noting that payment systems historically evolve over many years rather than through sudden disruption.
"No payment solution ever really goes away," he said. "People still write checks. What happens is volume shifts."
If stablecoins, tokenized deposits or other faster payment rails begin capturing even a modest share of transactions, credit unions could eventually see pressure on interchange income that has long supported checking accounts and other member services, he said.
"If that volume starts happening outside the traditional Visa, Mastercard, STAR and Accel networks, you're going to start seeing some interchange revenue drop-offs," Pruss said. "We've already seen interchange come under pressure for different reasons over the years. This could become another factor."
Rather than viewing that possibility as a threat, he said, credit unions should begin thinking strategically about how they participate in whatever payment infrastructure emerges.
Skate To The Puck
"I think institutions need to start skating to where the puck is headed," Pruss said. "Whether that's stablecoins, tokenized deposits, FedNow, RTP or some combination, you want to understand where you fit because the rest of the payments industry is already making those investments."
He acknowledged the transition could take years, perhaps decades. But if Fiserv ultimately does part with one of the nation's largest debit networks, Pruss believes the move may eventually be remembered as less about interchange fees than about a technology company repositioning itself for a fundamentally different payments landscape.
"If this sale happens," he said, "I don't think the story is simply that banks wanted a debit network. I think the story is that one of the biggest payments companies in the world decided the future opportunity may lie somewhere else."