Durbin Amendment

Debit Card

 Due to the Durbin Amendment to the Dodd-Frank Reform and Consumer Protection Act – as of October, 2011 the interchange rates or cost to accept credit cards is     lowered!    The Durbin Amendment regulates debit card interchange and debit networks.   Banks with less than $10 billion in assets are exempt from the Durbin Amendment regulations.    Estimates are this leaves around 80% of debit cards are not exempt.  

 Per the The Durbin Amendment, the Federal Reserve which regulates this, has capped transaction fees for debit cards:

  • 22 cents per transaction ($.01 cent per transaction for fraud prevention)
  • 5 basis points (.05%) of transaction value to account for fraud losses

The cost savings is around 45%. This applies to debit cards and is based on the national average of debit card transactions.  Does this mean that you as a merchant and business owner will see lower cost?  The answer is most likely not.  Why?  Because if you have a tiered rate structure, this is what most businesses have and a rate reduction is unlikely for these.  The Durbin Amendment only regulates interchange rates, not what an acquirer fees. 

We offer a rate structure known as interchange plus pricing.  This cost structure provides lower costs for business owners accepting debit cards.

Call us today for a review of your account in order to start benefiting from the Durbin