Durbin Amendment


Latest news:

January 15, 2014:
Recent ruling means that costs may go even lower, and merchants could potentially get refunds.


Debit Processing Costs:

Depending on your setup, you may be able to get lower pricing for swiping debit cards without a PIN pad, but this usually happens at restaurants and places where the numbers can't be easily entered.

Change in Interchange Fees May Save Merchants Thousands (or Millions, if you are a big retailer!)

Why do merchants like the Durbin Amendment?

The Durbin Amendment has created an opportunity for merchants who may already process credit card transactions. This is because the cost of debit card processing, which was already lower than most credit card transactions, has gotten lower. Debit card interchange fees, which normally get passed along to the merchant,  normally averaged 44 cents but under this amendment the cost is around 22 cents, so smaller transactions will now have added value to the merchant. Because card processing costs are often the second highest cost after employee labor, this puts more money toward the bottom line for merchants who install PIN pads in addition to their credit card readers. Most credit card terminals have ports that allow for the attachment of inexpensive pin pads, and this in turn creates more opportunities for merchants to save big dollars on high volume transactions. Aside from the security of taking debit cards, which drastically cuts the danger of chargebacks, the Durbin Amendment means that the cost of each transaction is nearly fixed, compared to those of credit cards which are a percentage of sales.  When you consider a charge of around 21 cents on a transaction compared to 2-5% of the whole sale, the advantage of installing debit card pin pads becomes obvious. Bigger companies, like WalMart, may stand to make hundreds of millions of dollars off of such a change, since they process a lot of small transactions in addition to bigger ticket sales, but any merchant should consider the security and convenience of using PIN pad readers.

Notes and Special Information

Special note: Note that pressure from credit card processors and some loopholes in merchant account processing laws may mean that your network can charge different interchange fees than ones listed here.