HOUSTON—When the Durbin rules on interchange were about to go into effect there were numerous predictions that it would decimate income streams at all credit unions, not just those that fell under its purview.
But a new study has found that the impact of the Durbin rules has been minimal on financial institutions that are exempt from the regulation.
PULSE’s 2015 Debit Issuer Study shows that 10 years ago financial institutions reported receiving a weighted average interchange of $0.41 for each consumer debit transaction. In 2014, regulated financial institutions earned a weighted average of $0.24 per debit transaction, and exempt financial institutions earned $0.40.
In addition to tracking debit interchange rates, the study also reports on debit revenue, beginning in 2008. In that year, debit issuers earned an average of $81 in annual interchange income per active consumer debit card. According to this year’s study data, exempt issuers generated average annual debit interchange revenue of $112 per card. Regulated issuers received average interchange income of $59 per card, with transaction growth helping to offset a portion of the impact of lower per-transaction rates.
“Debit continues to show resilience as a preferred payment type by consumers,” said Steve Sievert, executive vice president of marketing and communications for PULSE. “The study reveals that debit remains a key source of non-interest income for both regulated and exempt financial institutions at current interchange rates and card usage levels.”