SAN FRANCISCO (MarketWatch) – Visa Inc. and MasterCard Inc. shares climbed Monday as U.S. politicians reached an agreement on the regulation of interchange, or “swipe,” fees on credit and debit card transactions.

Assistant Senate Majority Leader Dick Durbin said in a statement that an agreement was reached on his amendment regulating such fees. The new language is expected to be eventually accepted by the group of politicians that are trying to craft a final Wall Street reform bill by early July, he added.

“We were able to reach an agreement, which makes minor changes to strengthen consumer protections and bring competition to a market where there is none,” Durbin said in a statement.

Visa shares gained 5% to close at $80.90 while MasterCard rose 4.2% to close at $223.34 on Monday.

Interchange fees are small charges that merchants pay Visa (V 80.99, +0.09, +0.11%) and MasterCard (MA 223.25, -0.09, -0.04%) for the right to accept debit and credit cards run on their payment networks. Those fees are then passed on to card issuers such as the big banks.

Almost $50 billion in interchange fees was collected last year and roughly 80% of that money went to the 10 largest banks in the U.S., including Bank of America Corp. (BAC 15.82, +0.03, +0.19%) and J.P. Morgan Chase & Co. (JPM 38.95, +0.08, +0.21%) , according to Durbin’s office.

Visa and MasterCard shares dropped in May, partly on concern about potential tough limits on interchange fees.

On Monday, Durbin’s office released modifications to his amendment on interchange fee regulation.

One change would allow the Federal Reserve to adjust interchange fees if card-issuing banks can show that an increase is needed to cover fraud-prevention costs.

The interchange rules passed by the Senate would have stopped Visa and MasterCard from preventing merchants from offering discounts to customers to use one network versus another. This provision has been removed from Durban’s modified amendment. In its place is a compromise that would direct the Fed to issue rules preventing networks from requiring that their debit cards only be used on one network.

The original interchange rules defined interchange fees to include debit card fees established by Visa, MasterCard and other networks that accrue to either the bank issuing the card or the network itself.

Monday’s modification states that the Fed can’t regulate network fees, which are fees that Visa and MasterCard charge and keep for themselves. The Fed would only have power over these fees to make sure they aren’t used to get around interchange fee regulation, Durbin explained in a statement.

Despite these changes, the rules will still introduce some limits on interchange fees.

“This agreement is a major victory for small business owners and consumers fed up with big bank and credit card industry rip-offs,” Rep. Peter Welch (D., Vt.) said in a statement. “It preserves key protections for the grocers, retailers and country store owners most affected by out-of-control swipe fees, while addressing legitimate concerns of the industry.”

A spokesman for Visa declined to comment.

Alistair Barr is a reporter for MarketWatch in San Francisco.

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