BIRMINGHAM, Ala.—One payments expert questions if anyone is benefitting from the Durbin Amendment.
Bill Hardekopf, CEO of LowCards.com, pointed out that a new study indicates that despite the Durbin rules being designed to save merchants money on debit card fees, less than 10% of participants in a recent Federal Reserve Bank of Richmond study reported a decrease in expenses on debit card transactions.
“According to the study, 67% of merchants did not see a change in their debit card fees after the new regulation. In fact, one in four merchants said they saw an increase in their fees, and only 8% reported a decrease in expenses after the Durbin Amendment,” said Hardekopf.
The regulation was not just designed to help merchants, Hardekopf reminded.
“It was also meant to save consumers money because, theoretically, merchants would not have to charge as much to cover the interchange or swipe fees,” he said. “Nevertheless, 23% of merchants reported price increases after the amendment, and 75% reported no price changes at all. Only 2% said they had offered price cuts since that time.”
A survey in October of 2014 by the Electronics Payment Coalition also found that consumers had seen very few price decreases as the result of the Durbin Amendment.
“Will this new information yield yet another change in debit card fees? Probably not,” said Hardekopf. “With the shift to mobile payments and chip-embedded cards over the next few months, there will be significant adjustments in all areas of the payments sector, not just debit cards. Any amendments to the already existing regulations will likely be delayed until the effects of these new payment options can be analyzed.”