Ready, Fire, Aim!
Last week, the bill that would have given congress more time to evaluate the ramifications of the Durbin Amendment, was defeated. This means that congress now has just a few weeks to figure out how the Durbin Amendment will be implemented. Industry giants are frustrated, financial institutions are frustrated and consumers are left wondering how the 'financial reform' bill will affect them- the answer to that question is pretty simple: NO ONE REALLY KNOWS YET!
- Debit Card Questions: Will my limits be reduced? Will my rewards program be eliminated? Will my card now come with additional fees?
- Merchant Questions: How will the changes impact my fees? Will I need to change the way I accept credit cards?
- Processor Questions: How do we deal with the 2 tier debit pricing created by the amendment? How do we educate our merchants when we don't even have the facts?
- Bank Questions: How do I make up for this lost revenue?
- Credit Union Questions: Since we are (in most cases) exempt from the 12 cent debit cap- how will our programs be affected and how will the proposed 2 tier program work for our members?
Everyone is waiting on congress to set the rules related to the Durbin amendment. While those rules are expected sometime next month, it is very likely that the banks will litigate to delay the implementation.
In the meantime- let's look at what we DO KNOW!
The legislation has given merchants the ability to set minimum purchase limits:
Merchants may require minimum purchase amounts on credit card transactions. The minimum purchase amount must not exceed $10 (or other amount as set by law), does not
apply to transactions made with debit cards, and cannot differentiate on the basis of the issuer or payment card network. Maximum purchase amounts can only be applied by
federal agencies or institutions of higher education on credit card transactions, and cannot differentiate on the basis of the issuer or payment card network.
The legislation has reiterated a Merchant's ability to offer 'cash discounts':
Merchants may also offer discounts or in-kind incentives for payment by use of cash, check, debit cards, or credit cards, provided that such discount for payment by use of a
debit card or credit card does not differentiate on the basis of the issuer or payment card network.
Stay tuned as we bring you the latest information on how the 'Ready, Fire, Aim legislation', known as the Durbin Amendment, will impact your rates (as a merchant), your debit cards (as a consumer) and the credit card processing industry overall.