The firms saw their share prices plunge by more than 10% off the back of the draft rules, which comes after the Fed was told to step in as part of the Dodd-Frank financial-overhaul legislation. The news also hits big issuing banks such as Bank of America, JP Morgan Chase and Wells Fargo.

Around 38 billion debit card payments were made in the US in 2009 with interchange fees totalling over $16 billion.

The Board is calling for comment on two possible standards; one based on each issuer's costs, with a safe harbour (initially set at seven cents per transaction) and a cap (initially set at 12 cents per transaction); and the other a stand-alone cap of 12 cents.

Either option would see the maximum allowable interchange fee received tumble to more than 70% lower than the 2009 average once the new rule takes effect on 21 July 2011.

The proposed rule would also prohibit all issuers and networks from restricting the number of networks over which debit card transactions may be processed.

Senator Dick Durbin, responsible for the interchange amendment to the Dodd-Frank bill, welcomed the Fed proposal, saying: "Today's draft rule from the Federal Reserve makes it clear that big bank interchange rates: overcharge businesses and consumers in America by at least three times the average cost of processing; that the reforms called for by my amendment will save retailers, charities and consumers up to $10 billion each year; and the changes we had to enforce by law in the US are being voluntarily implemented by mega-banks and card giants in Europe and other countries."

The Merchants Payments Coalition, representing 2.7 million US businesses, argues that the "proposed rules are a step forward in bringing fairness and transparency to the debit fee system".

In contrast, Visa expressed concern about the consequences, saying: "Given the importance and complexity of this undertaking, we believe the Federal Reserve must be given additional time to fulfil its responsibilities and to analyse the unintended consequences of the proposals on the industry and consumers."

MasterCard general counsel Noah Hanft was more openly critical, arguing: "Experience demonstrates that consumers, not banks or payments networks are the biggest losers as a result of this regulation. This type of price control is misguided and anti-competitive, and in the end is harmful to consumers."

The draft rules are now open to comment until February.