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Regulation

What Is The Durbin Amendment?

January 21, 2022 • by shall

Have you heard of the Durbin Amendment? What is it and how does it affect your business? Let’s take a look at how it came to be and some of the major points.

The Durbin Amendment Explained

Every time you use your debit card, you are using the Durbin Amendment. It was put into place as part of the 2010 Dodd-Frank law that was meant to keep banks and other companies from skyrocketing their processing fees when you use your debit card. It worked, and now when you use your debit card, you are charged around 21 cents per transaction instead of around 44 cents per transaction.

Effect On Consumers

While this sounds good in theory, it has caused a slew of other problems relating to fees. Because banks and other institutions are no longer able to collect these fees, they have figured out other ways to recoup their costs. Some of these include monthly maintenance fees on checking accounts, increasing other fees, and sometimes even making up a whole new fee to cover the costs. So while consumers are getting a better deal per swipe, they may actually be losing out in other areas.

Where Does This Fee Come From?

Most of the time, retailers will just add the fee into the item’s pricing. You won’t see the charge on your receipt, but instead, the price of goods in the store goes up just a small amount to help cover those fees. Just like credit card processing fees, which you also won’t see on a receipt, you will find that the prices in the retail store are made to make the consumer cover those fees in the end.

Effect On Retailers

Depending on the size of your retail business, you may notice a slight change due to these fees. If you are a smaller size retailer, you may not be able to offer as many payment options as some of the other, larger retail companies. This can hurt small business while intending to be a good thing for everyone. National Processing is here to help you navigate all the fees that come with processing payments in your retail location. We have a package that works for your business, and we would be happy to help you figure out which one will be your best bet. We offer a very transparent relationship with all of our customers, and the lowest possible processing fees that we can. Give us a call or sign up right on our website for more information.

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