Tag Archives: Credit cards

What the Heck is the Durbin Amendment…and how does it affect my business?

Joe Willett, Bloomington Area representative with Chamber member Infintech, helps to answer some questions that local business owners may have surrounding the Durbin Amendment. Although this amendment is supposed to lower fees on debit/check card transactions – there’s still a question:
Will Your Business Get 100% of the Federally Mandated Debit Card Fee Reduction?

Let’s hear from Joe:

You may have recently heard about the passing of the Durbin Amendment through Congress. The Federal Reserve recently issued its final ruling on interchange, or swipe fees on debit card transactions. In a nutshell, this amendment will force the banks to lower interchange fees on Visa & MasterCard debit/check card transactions to near nothing, but not every merchant accepting Debit Card transactions will benefit from this historic interchange fee reduction.

What’s an Interchange Fee?

An interchange fee is the charge assessed on a merchant every time you swipe your debit or credit card. The fee varies widely, depending on the card and the merchant, and is levied to offset the cost of fraud prevention and processing the transaction. Fraudulent charges on a debit card are relatively small, so they command lower swipe fees; signature cards have the largest swipe fees, since they often have the highest credit limits.

What does this amendment mean for consumers?

Banks have already factored in the loss of interchange revenue, and many are levying new fees on checking accounts, raising minimum balance requirements, and ending debit rewards programs. Credit card swipe fees account for 65 percent of the total interchange costs, so the savings from debit swipe fees are unlikely to be noticeable for consumers.

Although this law, effective October 1, is going to reduce the cost to process debit/check cards, it does not necessarily mean that savings will be passed to you as a merchant. Many processors will be the only recipient of these margins, and whether the merchant pockets the savings or if the credit card processor pockets the savings will be determined largely on the type of pricing model the credit card processor has a particular merchant set up on.

The Chamber invites  you to learn more:

To learn the facts about how the Durbin Amendment will impact your business’ bottom line, register online for a no charge webinars that Infintech is hosting that will help guide you through the complicated process of understanding the Durbin Amendment and its possible impact on your business.

Wed, Sep 21, 2011 9:00 AM – 9:30 AM EDT

Register Here!

To speak directly with the Bloomington Area Infintech Representative, Joe Willett, please call 812-568-6397 or email Joe at joe.willett@infintechllc.com