Jefferies' 2011 Electronic Payments Summit was held in New York on Sept. 20. The summit had six panel discussions focusing on private equity, prepaid, regulatory and legislative landscape, merchants and merchant acquirers, the future of U.S. debit and mobile money.

"Main takeaways from our Electronic Payments Summit were: Visa / MasterCard's competitive moat remains strong, mobile payments at the physical point-of-sale in the U.S. is nowhere close to mainstream adoption, the jury is still out whether more issuers will go with one versus two PIN debit brands post-Durbin, merchant acquirers could see at least a temporary benefit from Durbin rules, incremental plus for Global Payments and Total System Services," said Jason Kupferberg, an analyst at Jefferies.

He said multiple panel discussions at the Summit suggested that incumbent players in the payments industry such as Visa and MasterCard remain entrenched in the value chain with strong competitive moats and little in the way of significant threats from new entrants.

Potential threats to the U.S. credit interchange levels were not seen as material in the foreseeable future. He still believes potential disintermediation of "buy" rated Visa and MasterCard is even tougher to achieve post-Durbin.

He said the consensus among the panelists was that mobile payments in the U.S. at the physical point-of-sale are at least 3-5 years away from mainstream adoption.

Consistent with his view, the panelists said that developing a mobile payments solution that appeals to both consumers and merchants remained to be a challenge. That said, Google Wallet was highlighted on several occasions as having more potential promise than its competitors.

He said the summit heard arguments from both sides on this topic - those suggesting one PIN debit brand, who wanted to limit merchants' routing options.

The counter-argument (favoring two brands) is that it is easier to simply add an additional brand than "rip and replace" the existing brand on exclusive cards. Theoretically, Visa has the most to lose here, but he believes the exposure is quite limited (U.S. PIN debit only 4 percent to 5 percent of total revenue).

"The Durbin rules are 10 days away from implementation, and the general view among our panelists is that the merchant acquirers could benefit from these rules in multiple ways: pocketing (at least temporarily) some of the debit interchange savings, selling least-cost routing solutions to merchants, collecting payments from PIN debit networks to incent routing decisions," said Kupferberg.

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