Could This Be the End of Capped Debit Card Fees?
The Durbin Amendment – part of 2010’s Dodd-Frank Act – had retail merchants overjoyed.
Why wouldn’t they be? The Amendment capped the card fees merchants pay banks each time a customer makes a debit card purchase.
Now, Republicans are working to pass bills that would abolish the amendment altogether, claiming that merchants have failed to pass savings from these price caps to their consumers.
Retailers Strike Back
Retail merchants, however, aren’t ready to give the Durbin Amendment up. They made that clear on July 12, when more than 120 retailers signed a letter addressed to the U.S. House of Representative’s Financial Services Committee, urging them to reconsider both measures. Wal-Mart, Target and Best Buy are among those who signed the letter, reports Digital Transactions.
Before the Durbin Amendment, card-issuing banks had market power and card swipe fees were unregulated, which had an immense impact on many merchants – especially small ones, like convenience stores. Some were paying more in debit swipe fees than they earn in profits, reports American Banker.
The Durbin Amendment changed all that, protecting merchants by limiting these fees to something reasonable and proportional to the card issuers’ cost.
The Upcoming Presidential Election Opens the Floor for Durbin Opponents
While bills that would repeal Durbin measures essentially have no chance of becoming a law during President Barack Obama’s Presidency (President Obama signed Dodd-Frank), the upcoming election gives both opponents and supporters of the Durbin Amendment a new opportunity to make a stand.
Stay tuned and as potential changes arise, ask a payment processing advisor what this means for you.
Contact i3 Merchant Solutions online or call 1-800-621-8931.
Subscribe to Card Talk
Our monthly newsletter delivers the latest payments news straight to your inbox