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Durbin Amendment: Beware Debit Fee Changes!

Posted by Abhishek Doshi

Mon, Feb 06, 2012

Credit card trapOn October 1st, 2011, the Durbin Amendment went into effect. One of the fallouts of the implementation of this was a sharp increase in the cost of most small ticket debit transactions. See the following Fresh Cup article written by one of our staff that discusses this issue.

Fresh Cup Magazine – November 2011 – What does the Debit Card Debate Mean to Coffee & Tea Retailers

Now that more time has passed, we are unfortunately seeing that this issue appears to be going nowhere in Congress in this election year, and the large banks eliminated their debit card fees (have focused more on general account fees). Unless you are selling a lot of gift cards or are in a market with a ‘small’ bank that has considerable market presence, your credit card bill has most likely increased significantly.

If you have not already done so, please VERIFY that your pricing structure both allows for the benefits of Durbin as well as the hit! As stated in the article, most debit transactions in excess of $11 will be at a lower cost. If you have ‘blended’ pricing, you may not receive those benefits without asking. If you are in a ‘cost plus’ agreement, there should be nothing for you to do beyond the efforts to increase the size of your average debit transaction to avoid fees.

Please talk to our sales staff, if you want to hear more about how we can help you reduce debit and credit card fees. Selling prepaid cards can significantly reduce your credit card costs by reducing costly swipe fees (can pay for the cost of the cards in less than a week and the rest is savings to you).

If you are already a Coffee Shop Manager customer processing with one of our merchant partners, their typical agreements should have you both receiving the unavoidable hit and the benefits on larger transactions, but please review your bill in detail to confirm.

 

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Topics: Credit Cards