09/20/2011

The Durbin Amendment: How to Ensure You See the Benefits

We’ve heard a lot of buzz about the Durbin Amendment and the major cost savings that should come in response to the legislation. Last month, we introduced the main points of the legislation and encouraged those of you who do not currently support debit to consider doing so in order to capitalize on the upcoming rate reductions.
This month we’ll talk to those of you who already utilize debit and explain what you need to do to make sure you get all the savings you can out of this new legislation.

The Durbin Amendment regulates the debit interchange rate, not the discount rate you pay to your Merchant Services Provider (MSP). The first thing you should do is contact your MSP and find out if they will be adjusting your debit rate in accordance with the new legislation.

When you call, you may want to have this article open or printed so you have the facts in front of you.
The Facts

  • As of October 1, 2011, the new debit interchange fee will be capped at 21 cents plus .05% of the transaction value.
    • If issuing banks implement standardized fraud prevention, they may charge an additional one cent per transaction to recover their costs.
  • Under current rates, a $38 debit transaction (the national average for debit transactions) would cost the merchant approximately 44 cents. The new legislation will cap the fees for this transaction at 24 cents.
  • The Durbin Amendment only affects debit transactions. Your credit card interchange should not increase.


If your MSP is not planning to pass these savings on to you, they essentially just gave themselves a 100% raise. Are you OK with this? They’re soon to be saving nearly 50% on debit processing; shouldn’t the vast majority of those savings be passed along to you? We think so.

Remember, if you need to change banks, processors, or MSPs, Shift4 makes it easy to do.