What's the Durbin Amendment?
Due to the Durbin Amendment of 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:
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.
First Coast Payments offers a rate structure known as interchange plus pricing. This cost structure provides lower costs for business owners accepting debit cards.
Contact us today for a review of your account in order to start benefiting from the Durbin Amendment.
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.
First Coast Payments offers a rate structure known as interchange plus pricing. This cost structure provides lower costs for business owners accepting debit cards.
Contact us today for a review of your account in order to start benefiting from the Durbin Amendment.
