Durbin Amendment Explained
The Durbin Amendment was set originally to take effect on 21 July, 2011. With this amendment, the maximum interchange fees on debit cards was supposed to be 12 cents for both signature debit as well as pin debit transactions but it was applicable for banks which had more than $10 billion as assets. Due to Durbin amendment, the average debit card fees were reduced to over 70% which was average earlier 44 cents.
When final rules were implemented, the maximum interchange fees was raised to 21 cents and an additional 5 basis points allowance was taken into consideration to account costs involved in dealing with frauds and banks were given permission to charge $.01 cent for each transaction if they met fraud prevention standards.
No doubt with Durbin Amendment, merchants still remain winners as interchange expenses have decreased but on other positive side, banks have not lost as much as it was feared earlier.
Are you getting Durbin Amendment savings?
If your services program pricing is basis on tiers or if your monthly merchant statement has codes ERR or BB, you should be watchful. Chances are there that you are paying down-grade fees as well as hidden mark-up fees about which you have no idea and you might not be receiving savings proposed by Durbin Amendment.
Getting Durbin Amendment Savings
Merchants that operate on true interchange pass are able to give their consumers benefits of full savings. Thus, if you are not on interchange pass, it is high time to shift your service provider. You can ask your service provider about pricing program which don’t has any mark-ups or hidden fees and if they have raised their rates recently. This helps you to avail services of those merchant service providers which pass savings to their consumers and you will be getting benefit for many years into the future.
Does Durbin Amendment affect all debit cards?
The answer to this question is no. Durbin amendment doesn’t affect all debit cards. If your bank is small bank which don’t have $10 billion assets then your card is not affected and your bank will be charging your card at their existing rates.
Choosing best merchant service provider
When you are going to choose a service provider, make sure they are able to give an exhaustive statement analysis and their employees have knowledge about all processing charges. The provider should be honest and transparent as well as financially sound.
At http://www.worldpay.us/Durbin.html learn benefits of Durbin Amendment introduced to lower total cost of accepting debit cards.
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