How is the Durbin Amendment Debit Interchange Fee Cap impacting Small Ticket Interchange Costs?

The Durbin Amendment to the Dodd-Frank Financial Reform Bill requires the Federal Reserve to regulate and cap Debit Card Interchange Fees collected by issuing banks with over $10 billion in assets.

On June 29th 2011, the Federal Reserve released its ruling capping debit card interchange rates at $0.21 + 0.05% plus an additional $0.01 for costs related to fraud prevention, if the issuing bank meets certain standards and practices for preventing fraud. This cap applies to both Signature and PIN debit transactions, and to both card present and card not present debit transactions. The rule went into effect in October 2011.

As a result of the Durbin price controls, Visa and MasterCard eliminated debit interchange discounts on Small Ticket transactions ($15 and below). Prior to the cap, the Card Associations offered discounts on Small Tickets as a way to encourage debit card acceptance for these types of transactions. The discounts were effectively subsidized by higher interchange on larger sales. When the price controls eliminated the revenue from the larger sales, Visa and MasterCard decided to eliminate the discounts on Small Tickets. The Durbin price cap effectively became a price floor. Pre-Durbin, a Visa debit card issued by a bank with over $10 billion in assets received Small Ticket Interchange on a $5 sale: $5 x 1.55% + $0.04 = $0.12. Under Durbin, the same card cost $5 x 0.05% + $0.22 = $0.22. An increase in cost of close to 50%.

Burlington Bank Card strives to provide our merchants with secure and reliable interchange plus merchant payment processing, transparent pricing, and one-on-one personal service.

Burlington Bank Card always passes on true Interchange costs to all of our merchants: Pricing & Rates

Please call 1-800-758-1002 or contact us to learn more about the Durbin Amendment, Interchange Rates and Fees, and Interchange Plus Credit Card Processing. 

Visa Small Ticket Interchange Rates October 2011

Visa Small Ticket Interchange Rates October 2011

  • Debit: 1.60% + $0.05
  • Credit: 1.65% + $0.04
  • Capped Debit: 0.05% + $0.22
MasterCard Small Ticket Interchange Rates October 2011

MasterCard Small Ticket Interchange Rates October 2011

  • Debit: 1.55% + $0.04
  • Credit: 1.90% + $0.00
  • Capped Debit: 0.05% + $0.22