The New Debit Card Regulations: Initial Effects on Networks and Banks

This review of the effects of the Durbin Amendment by Federal Reserve Bank of Kansas City senior economist Fumiko Hayashi examines the impact of fixed-pricing plans on competition among payment card networks in the regulated debit card environment.

In response to the Durbin Amendment's regulation of debit card interchange, several networks have implemented pricing plans with fixed components that reward merchants with lower variable pricing if they commit certain transaction volumes to the network. The most well-known is Visa Inc.'s Fixed Acquirer Network Fee (FANF), but MasterCard Inc., Star, NYCE, and Pulse have all implemented similar pricing plans. 

The New Debit Card Regulations: Initial Effects on Networks and Banks. By Fumikp Hayashi, Federal Reserve Bank of Kansa City