Tag Archives: debit card transactions

Merchant Services: Why You Need a Processor

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The Official Merchant Services Blog functions on the logical premise that our readers are interested in the topics we cover, most notably merchant services. We strive to bring you useful news, tips, and insight that can help you as both a merchant and a consumer. That means that sometimes we delve into complex topics, like our multipart series on Payment Gateways. And other times we tackle newsworthy topics, like Google+ being opened up for business pages.

But today we’re going to get down to the basics and discuss the very heart of merchant services: Credit Card Processing. Credit cards, the plastic payment solution has become the most convenient form of payment for countless consumers. Why is it important for merchants to give their customers the option to pay with a credit card –– specifically on that merchant’s web site? Here are 10 of the top reasons we think credit card processing is an important option for merchants:

  • Competitive Advantage: If your business has the most options and the most flexible payment systems, you have an edge over your competition.
  • More Sales: Data collected on consumers shows that credit card owners buy 25 times more merchandise than customers who pay cash.
  • Cashless Society: We’re not there yet, but the trend in online shopping and electronic payment systems indicates that credit card and debit card processing are quickly becoming the preferred methods of payment. This will take center stage in business news next week when Black Friday goes right up against Cyber Monday.
  • Convenience: One of the primary reasons credit and debit card transactions are becoming so popular is because buying goods online with just a few mouse clicks is extremely convenient to consumers.
  • Impulse Sales: Credit Cards give customers the freedom to buy on impulse, spending money on previously unplanned merchandise. Cash is finite and in the pocket. But plastic lets customers reach beyond what they have in hand.
  • Enhanced Advertising: Customers are more likely to shop at businesses that accept their credit card. As such, they tend to look for and read ads from businesses that accept their credit cards first over other ads.
  • Steadier Sales: Credit Card business has less peaks. Cash using consumers buy heavily on payday and just before holidays, but credit card using consumers make purchases whenever they need to.
  • Larger Volume: Accepting credit cards helps merchants attain higher unit sales and extra orders.
  • More Expensive Merchandise: Credit card customers are sometimes less conscious of slight price differences. They are more likely to spend a bit extra at a merchant simply because they accept their form of payment instead of seeking out wholesalers or discounters who do not accept their credit card.

We’re interested in your feedback. What other reasons would you add to this list?

Tips and Terms

Revenues generated by credit card use are fast approaching the $200 billion mark. Your business can benefit  by offering credit card payment processing. To understand the process better, we’re going to define some of the important terms involved in credit card processing and give some insight into how it all works:

Acquirer – a bank, which is often a 3rd party provider, who processes and settles merchant credit card payments.  This can be a bank providing your merchant account or a service that provides it to your processing company.  The acquirer works with the credit card issuer.

Authorization – is the first step that happens after the credit card is swiped.  The purchase and card information are sent to the acquirer who, in turn, sends the same information to the credit card issuer.  The credit card issuer then accepts or declines the transaction.  If accepted, an authorization code is generated and the purchase transaction is continues to the next step, namely: batching.

Batching – is the review process done by a merchant on all credit card transactions for the business day.  The review process involves ensuring all credit card transactions are authorized and signed by the cardholder.  After the review process, the merchant sends the information as a batch to the acquirer to receive clearing for payment.

Cardholder – he is the customer as specified on the credit card, the customer so to speak.

Card network – these are networks that act as an intermediary between the acquirer and the issuer.  Card networks transfer the information originating from the acquirer to the issuer about the purchase.  This happens in the authorization process.

Clearing – the third step in the payment process which happens after the acquirer sends the batch information through the card network to the issuing bank.  The card network acts as a router depending on the credit card issuer found on the purchase detail.  This process permits revenues for both the issuing bank and the card network called the interchange fee.  After deduction of interchange fees, the issuing bank sends the information back to the acquirer through the same card network used.

Discount fee – this fee is paid for by merchants to the acquirer to cover processing costs.

Funding – the fourth step in the credit card payment process.  This involves the acquirer sending back the transaction information to the merchant less the discount fee.  The merchant receives the remainder of the payment and is now considered paid.  This generates the cardholder’s billing statement and accounts are funded appropriately.

Interchange fee – the fee charged by card networks and card issuers to the merchants.  This fee is regulated to about 1 to 3 percent of the total purchase amount and covers the costs associated with credit card acceptance.

Issuer – the financial institution who issues credit card products to its customers.  Examples of major issuers include Discover, Amex, Visa and Mastercard.

A Step By Step Guide

And finally, to get an easy to read visual guide on how Credit Card Processing works, please visit the Host Merchant Services article archive here:

How Credit Card Processing Works

The Allure of Credit Cards for Holiday Shopping

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With the Holiday Shopping Season fast approaching –– Black Friday is 11 days away, Cyber Monday is 14 days away –– the payment processing industry is still getting the last pieces in place for a brisk rush in the use of credit and debit cards. The Official Merchant Services Blog continues its series focusing on the impact the holiday shopping season is going to have on both the e-commerce industry and merchant services in general.

The battlefield is set between Debit cards and Credit cards. Debit cards received a huge boon from the federal government in the form of a cap on interchange fees that went live on October 1, 2011 in the form of the Durbin Amendment. This cap restricts the interchange fees that can be applied to Signature debit card transactions. The cap restricts the charge to between 21 and 24 cents per transaction. This is a huge cut from the previous average of 44 cents per transaction, and presents debit card transactions as an attractive option for merchants to start accepting right as we slip into the big holiday shopping rush.

That has left Credit card issuers scrambling for a response, trying to stay competitive and keep consumers answering “Credit” at the checkout line.

This Reuters article suggests one of the big campaigns that credit card issuers are going to push this year is a significant raise in rewards programs for their customers, tempting them to choose credit as their swipe of choice to get access to those sweet sweet rewards. A focus on cash back and travel rewards push the right buttons for consumers while holiday shopping.

A Look At The Numbers

Here’s a small chart detailing the dichotomy between debit card usage and credit card usage from consumers in 2010:

The chart breaks down the chosen method of payment among a survey of credit card owners from 2010. Key numbers to note are the Travel category –– which is dominated by credit card use. It is unlikely that the Durbin Amendment and its changes are going to really affect that sector. But looking at the category listed as “Personal Items” –– which would tend to be the category for holiday gift purchases –– you’ll see a much tougher competition between the two transaction choices. This is where the Durbin Amendment changes to debit card swipe fees are going to have a large impact. And this is where the juicier cash back rewards have credit card issuers hoping they can keep things competitives.

According to the Reuters article: “For example, both Chase (CCF.A) and Citibank C.UL have cards that are offering new applicants $200 in cash back after they spend $500 on their cards.”

You Have to Dig to Find the Best Deals

Some of the best deals are not always displayed in easy to find places. The Reuters article cites a Citibank deal. On the Citi website it advertises the deal as $150 cash back on your first $500 of purchases. But then if you dig deeper by google searching “Citi Dividend $200” you find the better deal directly.

Making it Work For You

The really effective strategy to maximize these deals is to combine them with other deals you will be hit with during the holiday shopping season. The Reuters article notes: “Some cards (such as the Upromise card) have their own shopping portals that combine their rebates with rebates from merchants. In other cases, you can use your rewards points directly for holiday shopping; American Express (AXP.N) awards can be paid directly to Amazon for purchases, for example.”

This type of deal stacking gives consumers a lot of shopping incentive to choose credit as their swipe choice.

chargeback ratio

Durbin Saga: Banks Reconsider Fees [2023 Update]

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The Official Merchant Services Blog brings you a breaking news story following the ongoing aftermath of the Durbin Amendment legislation. Yesterday, Bank of America announced it was going to cancel its $5 monthly debit card fee plan. This falls in line with similar announcements from Sun Trust, Regions Financial Corp., JP Morgan Chase & Co. and Wells Fargo all stating they were no longer going to test monthly debit card usage fees at all.

As previously reported, there has been a staunch amount of criticism and backlash against Bank of America after it announced it was going to charge customers a $5 monthly fee to simply use their debit card. The bank was one of a group of banks gearing up to charge fees for debit card usage, all in a response to a debit card swipe fee cap that was instituted by the financial reform legislation in the Durbin Amendment. This reaction was predicted by Host Merchant Services earlier in the year when the company analyzed the Durbin Amendment and its potential impact.

As reported by The New York Times yesterday: “Bank of America blinked on Tuesday. The bank, the nation’s second-largest, said it was abandoning its plan to charge customers a $5 fee to use their debit cards for purchases. Only a month earlier, the bank had announced the new charge, immediately setting off a huge uproar from consumers.”

Primary Target

Bank of America became the most high profile target of consumer backlash and had a polarizing effect throughout the media on this issue, thrusting the Durbin Amendment and big banks firmly into the spotlight. Part of what made Bank of America the primary target for the Durbin Amendment stories was that they were the only bank that declined to test the fees, deciding to just add the fee starting in 2012. Another part that made Bank of America a target was their position as the leading bank in terms of debit card transactions. And finally, Bank of America made such a tantalizing target because of its history with receiving federal bailout money and their foreclosure practices which caught the attention of the Occupy Wall Street protest movement.

As reported in a Business Week article: “Bank of America Corp. is scrapping its plan to charge a $5 monthly fee for making debit card purchases after an uproar and threatened exodus by customers.The about-face comes as customers petitioned the bank, and mobilized to close their accounts and take their business elsewhere.”

You can review much of that saga in Host Merchant Services own Countdown to Durbin blog series.

Last Bank Standing

And while the customer outcry and criticism was certainly a factor, it’s also worth noting that Bank of America came to this decision after all the other major banks backed off fees. As reported by the New York Times: “Despite an outpouring of complaints online and at branch offices, the bank had remained steadfast in its plans until last Friday, according to a person briefed on the situation, planning to ease just some of the conditions for avoiding the fee. But over the weekend, after two major competitors — Wells Fargo and the nation’s largest bank, JPMorgan Chase — said they were backing away from their plans to levy similar charges, two high-ranking Bank of America officers recommended to Brian Moynihan, the bank’s chief executive, that the bank simply drop the fee.Then, on Monday morning, when SunTrust, a regional bank in Atlanta, said that it, too, would abandon its $5 charge, Bank of America was left standing alone, the last major bank planning the fee. The announcement came on Tuesday.”

And also reported by Business Week: “The outcry had already prompted other major banks, including JPMorgan Chase & Co. and Wells Fargo & Co., to cancel tests of similar debit card fees last week. SunTrust Banks and Regions Financial Corp. followed suit on Monday.”

What Next?

This move by the banks, however, leaves them still searching for a way to offset the losses that the Durbin Amendment and other financial reforms are going to force onto them. The New York Times article suggests: “Now that all the large banks have decided not to impose the debit fee, experts said, they will find other ways to fill the hole. ‘Those revenues paid for a lot of things,’ said Joe Gillen, chief executive of Pinnacle Financial Strategies, a bank consultant in Houston.

Now, he said, consumers can expect more fees over time. ‘It will be slow and gradual, but they will bring those revenues back,’ Mr. Gillen said.”

And the Business Week Article stated: “In particular, banks in the past year have blamed their fee hikes on a new federal regulation championed by Senator Dick Durbin of Illinois. The law, which went into effect last month, caps the amount banks can charge merchants whenever customers swipe their debit cards. JPMorgan has said it would lose $300 million each quarter as a result of the regulation; Wells Fargo said it would lose $250 million a quarter.”

The Official Merchant Services Blog will continue to keep you updated on all aspects of the Durbin Amendment. With the banks backing off of their proposed fees, it looks like the next development may hinge on the viability of the October 14 bill introduced into Congress to repeal the Durbin Amendment.

Durbin Backlash: Bank of America

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Today The Official Merchant Services Blog will take you through a quick roundup of the backlash over the Durbin Amendment. Host Merchant Services has kept  its finger on the pulse of this legislation as it weaved its way through congress and into reality. The HMS article section gives you a comprehensive analysis of the legislation, which also very accurately predicted its impact on consumers, merchants and banks. The Official Merchant Services Blog also ran a 10-day series leading up to the October 1 start date for the legislation, titled Countdown to Durbin. That series selected relevant articles from around the internet and compared them to HMS’ detailed analysis of the legislation.

Since then, the story has continued to grow. It’s been spurred on by Bank of America, who announced in 2012 it would be charging its customers $5 per month to use debit cards. This move was clearly the bank’s response to the cap on swipe fees, and garnered quick and scathing negative reaction, as noted in this blog during the Durbin series. The bank was blasted for adding this fee after taking federal bailout money in the past. The bank was criticized for being the largest bank in terms of debit card transactions and thus one of the primary targets of the legislation. A Fox News anchor even cut up her debit card on the air to express her outrage over this news.

And then the protesters got involved.

Bank of America Gives Wall Street Protesters a Target

While initially the protesters on Wall Street were criticized for not having as much organization or specific goals as movements from decades prior, the Durbin Amendment and the Bank of America fees polarized enough people to fix that hole in the campaign right up. A Los Angeles Times article had this to say on it: “The announcement by Bank of America Corp. last week that it would charge customers $5 a month to use their debit cards has rung up animosity from coast to coast.

Coming amid growing anti-Wall Street protests, BofA’s new fee has become a focal point for anger and frustration about the flailing economy and Washington’s attempts to help the nation recover from the financial crisis.

Some banks are testing similar, though lower, debit card fees. But BofA was the first major player to take the plunge. And since it is the nation’s largest bank — as well as the beneficiary of one of the biggest taxpayer bailouts — the move has put a target on its red-white-and-blue logo.”

In our Countdown to Durbin blog series, The Official Merchant Services Blog cited reports that the first banks to put forth Debit card fees would indeed become a target and get negative reactions over their move. But the timing of the Wall Street protests that sorely needed something to latch onto, combined with Bank of America’s history with federal bailout money, and their foreclosure practices amplified the backlash. People began getting rowdy about it. And visiting Bank of America lobbies to be rowdy about it.

  • This Boston Herald article describes arrests made in protest of Bank of America: “Two dozen trespassing protesters were happily hauled off from Bank of America’s downtown offices last night in a gesture of civil disobedience against what they say are the leading lender’s unfair foreclosure practices.”
  • This Chicago Sun-Times article reports arrests were made at a Hyatt Regency and Bank of America in Chicago as part of the growing big bank/big business protest.
  • This Huffington Post article has images from a Los Angeles protest where 500 people stormed the downtown, including 10 protesters that were arrested in a Bank of America lobby.
  • And this Shore News Today article reports the protests spread to a Bank of America branch in Somers Point, New Jersey.

So What’s Next?

With all of the backlash and the protesting, one has to ask what the next step is? This ABC News 10 article suggests Online Banking: “According to financial website “Daily Finance”, many Americans are closing out their accounts and opting for online banks due to frustration over new debit card fees.”

E-commerce is booming and consequently this has created a much more viable niche for online banking. The article goes on to quote financial consultant Katrina Semmes: “Online banks are certainly worth looking into, but you need to do your homework to make sure they are reputable.” Semmes advised people to seek out the more recognized online banks.

“Semmes pointed out that some of the benefits of online banking include higher money market rates, 24/7 access to your account, and a reduction in one’s carbon footprint, meaning you don’t have to drive to the bank. She said some of the cons include a lack of ATMs with some online banks, no personal touch, and longer processing times for deposits and documents requiring signatures.”

But Online Banking isn’t the only reaction being touted. This Los Angeles Times article details how smaller banks and credit unions are primed to swoop in and grab disgruntled customers: “Regional and community banks such as L.A.’s City National Corp. and Chula Vista’s PacTrust Bank are lining up to take the anti-Bank of America pledge: no debit-card fees. For now, at least.

It’s an appealing come-on following BofA’s decision to charge customers $5 a month to swipe the cards — even for bankers who say new Federal Reserve regulations have unfairly capped what they can charge merchants for accepting the cards.”

Coming Full Circle

Although the most fascinating reaction to the Durbin Amendment can be found in this Huffington Post articlewhich details a call for a Justice Department Investigation: “House Democrats responding to the recent announcement of a new Bank of America debit card fee are calling for a Department of Justice investigation into Wall Street banks, charging that the timing of that announcement and the announcement of similar fees at other banks suggests possible collusion among the major players.

Bank of America, SunTrust, JPMorgan Chase and Wells Fargo have all recently announced new debit card fees. The banks cite a need to raise revenue to make up for diminished profits coming from merchant swipe fees as a result of recently passed reform legislation.”

A Short Opinion Break

So this is how things went with Durbin … It was introduced as an amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act. It’s goal was finance reform, specifically targeted at easing the burden of the consumer by putting a cap on debit card swipe fees. It was lobbied against in Congress by banks and credit card companies. Its debit card swipe fee cap was changed from the extreme 12 cent cap to a 21 cent cap with provisions that raise it to 24 cents. And then it was pushed back to October 1st, giving everyone time to prepare, and speculate what would happen. Most every report, story and analysis that came out about what would happen suggested that because the general scope of the reform legislation left all these other avenues there for banks to respond, that banks would do exactly what they did: Shift the fees to the consumer instead of the merchant.

All of that happens, like clockwork. And the government’s response? To push for the Department of Justice to investigate the banks for doing what many people, including the banks, said they would do.

Durbin Amendment Is Here

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Today is the day. October 1, 2011 the changes brought on by the Durbin Amendment take effect. The Official Host Merchant Services Blog has been running its Countdown to Durbin series leading up to today. We end our series with one last gallop through the media coverage of the law.

Durbin Amendment Costs People Their Job

The most attention grabbing link we found on the day of Durbin taking effect was this article from Credit Newsline, stating the Durbin Amendment forced a Texas bank to close branches and lay people off. The article stated:

“The Laredo, Texas-based International Bancshares Corp. announced on Friday that it will shutter 55 grocery store branches and lay off approximately 500 people in response to the Durbin Amendment, which will cap what banks can charge merchants for debit card transactions.

“Government many times passes regulations that end up hurting the very people they were intended to help,” International Bancshares Corp. chairman and CEO Dennis Nixon said. “This appears to be one of those cases.

Nixon said that the $11.8 billion International Bancshares will close the grocery store branches so that it can continue offering free checking to its customers following the new interchange legislation, which takes effect on Oct. 1. The company said that it relied on revenue from debit card fees to cover the cost of free products and services for consumers and is shutting the branches to offset the loss of revenue.”

The last bit we’ll leave you with comes from Fox Business Network, and it’s a save the date tidbit on October 1:

“The significance of Oct. 1 is not limited to the world of plastic cards. Thomas Edison opened the first electric lamp factory on this date in 1880. Yellowstone and Yosemite National Park, in 1890, were established by the U.S. Congress. And on October 1, 1992, the Cartoon Network launched. In any case, you and your local store owners may not look at your debit card, or your credit card, in quite the same way again.”

Remember to read Host Merchant Services’ extensive analysis of the Durbin Amendment here. And we’ll be back to regular blog reporting on Monday but will most likely have more information related to the Durbin Amendment going forward as the banking industry is just getting started with its plans to react to this law and the changes it brings.

Durbin Amendment Ready To Go [2023 Update]

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The Official Merchant Services Blog continues to keep its finger on the pulse of the Durbin Amendment media buzz. The legislation that marks regulation that caps debit card swipe fees begins to take effect on October 1, 2011. And there’s still a lot of scrambling from various media sources to try and predict how banks, merchants and consumers will be impacted by the cap on the billion dollar payment processing industry.

Host Merchant Services has been ahead of the curve in both its analysis of the legislation and its reaction to the legislation.

Today, The Official Merchant Services Blog takes a look at two different articles discussing the Durbin Amendment and the changes it brings.

Banks Plan to Recoup Durbin Losses With Other Fees

The first article comes from mainstreet.com. It’s a pretty standard discussion of the most predicted reaction: Banks will react to the losses that the Durbin Amendment cap places on their swipe fee revenue from previous years by creating new service fees for debit card use. So instead of charging per swipe, the banks move the charge directly to the cardholder as a service fee for having debit card services available to them.

The article cites a robust number of debit card users in the U.S.:

“Americans sure love their debit cards. Between Visa  and MasterCard there are more than 520 million debit cards in use nationwide today. “

That frames the basis of why banks are working to come up with a reaction to the Durbin Amendment. With that many debit card users in the country, there are billions of dollars in profit being cut into with the swipe cap. As the article explains, a quarterly survey of debit card use by financial consumers produced by Manhattan-based Auriemma Consulting Group finds: “banks remain stung by changes in debit card fees (called interchange fees) that reduced the amount of fees banks could charge customers for debit card transactions. The changes, which were triggered by the Durbin Amendment in the Dodd-Frank financial reform bill, basically cut debit card transaction fees in half, the ACG reports.”

The article goes on to explain how many banks are wary over the consumer backlash that could result from charging monthly fees for debit card use and scaling back or restricting reward points programs. The article quotes  Ed Lawrence, director of the debit marketing roundtable at the ACG as saying: “The first-movers to institute debit/checking fees in a given market will experience the most scrutiny and possible attrition, along with negative press; as others follow, customers will have fewer places to move to.”

The conclusion drawn from the article is that Durbin puts the banks in a position where they have to react with changes in how they offer debit card services. And the most likely choices are consumer fees for debit card usage and/or reward points programs being restricted or removed. The banks know these choices will be unpopular with consumers but there’s likely to be a domino effect where once a few banks do it, many more will follow suit, leaving consumers with less and less alternatives.

Some Tips On Dealing With Durbin

The second article comes from USA Today’s Money section. Sandra Block offers some insight into Durbin that mirrors much of the insight every other article about Durbin that The Official Merchant Services Blog has reviewed. But Block offers consumers advice on how to deal with the changes that Durbin is going to bring to their wallets: “The good news: There are numerous ways to avoid these fees. Some tips …”

Block offers four basic tips for consumers to do in response to their bank’s reaction to the Durbin Amendment.

  • Tip 1: Forget about interest checking accounts. Block notes that the increased cost of maintaining this type of account ($5,587 for the interest account vs. $585 for the non-interest account) isn’t worth the 0.08% interest the account offers.
  • Tip 2: Set up direct deposit. Block notes that many banks offer to waive checking account fees for customers who set up direct deposit.
  • Tip 3: Consider switching to a small bank or credit union. Block notes that banks and credit unions with assets lower than $10 million are exempt from the Durbin Amendment changes.
  • Tip 4: Watch out for Debit Card fees. Block’s final tip is for consumers to pay close attention to their debit card fees. Many banks may not change immediately and be slower to react to Durbin so consumers should be aware of the details of their statements going forward.

The Official Merchant Services Blog keeps finding the same theme that the media is bringing up about the Durbin Amendment. Banks do not want to lose the billions of dollars that their transaction fees were bringing them prior to the swipe fee cap. So they are going to find ways to move things around to keep the revenues coming in. And many of the proposed changes are ideas that will end up being shouldered by the consumers. The demographic that this finance reform legislation was initially supposed to assist.

What Durbin Will Change

Roundup of What Durbin Will Change

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The changes to interchange fees and debit card transactions brought on by the Durbin Amendment are just days away. The Official Merchant Services Blog is going to give its readers a quick hit of some of the chatter that is heating up the internet as we close in on the day the changes take effect. As with the previous articles, we’ll be using Host Merchant Services’ own Durbin Analysis as the foundation for comparison. We’ll be touching on 3 separate articles today so the comparison will be brief and focus on the highlights.

Citigroup Focuses on Credit Cards

The first article we find comes from The Wall Street Journal. This article points out how Citigroup is reacting to the changes that its competitors Wells Fargo and SunTrust are making because of the Durbin Amendment. Both of which were reported in our last Countdown To Durbin Blog, but can be summed up as both of those banks are going to implement a fee for debit card use that its customers have to pay each month.

Citigroup, according to the Wall Street Journal, is pushing an aggressive credit card campaign to its customers. Citi mailed an estimated 346 million credit card offers to North American customers in the third quarter of this year, the Wall Street Journal reported in the article.  The article suggests this move is at least partially motivated by a void that will be created by the Durbin Amendment:

“One potential void was created last year by an addition to the Dodd-Frank Act, which overhauled financial regulation. Known as the Durbin Amendment, the new rules, which go into effect in October, will limit the fees that banks collect from merchants each time a debit card is swiped, making cards far less profitable for the issuers.

As a result, some issuers are making debit cards less attractive by charging monthly fees and eliminating rewards. Citi is hoping to capitalize on this change by convincing dissatisfied debit customers to use its credit cards instead.”

This builds off of what our previous article found, that Durbin focuses on debit card transactions so one viable reaction to the Durbin changes is to switch focus to Credit Card Processing.

Consumer Reaction To “Too Many Fees”

The next article we cite comes from an NBC news affiliate in Indianapolis, IN, wthr.com. This article contains some evocative reaction from consumers regarding debit card fees. It cites what Regions Bank is doing in reaction to the changes from the Durbin Amendment:

“Regions issued a statement saying regulations have changed and, as a result, banks are adjusting how they cover the costs of providing debit cards. For some customers, that will mean a monthly fee for a debit card beginning in October. While Regions and other banks say the change is necessary, it isn’t popular.”

Which we have cited before as being a very popular reaction from banks regarding the federal regulations. This article quotes debit card using consumer reaction:

“I think it’s my money and I shouldn’t have to pay to use it,” said Andrea Moxley.

“Enough is enough. Too many fees,” said another woman.

This underscores the reaction that many of these articles are finding. Consumers, the group the legislation was supposed to help with its reforms, are not pleased with the shifted burdens that end up not helping them in the end.

Merchants Can Save

The final article we cite comes from Jennifer D’Angelo. It’s a blog of hers that goes into detail about how Merchants can take advantage of the Durbin Amendment changes to save money. D’Angelo suggests Merchants can save up to $1,200 per year because of the Durbin Amendment. She states:

“Under a new law called the Durbin Amendment that takes effect Oct. 1, any merchant that takes debit cards — from retail stores, restaurants, gas stations, and small businesses like chiropractor’s offices — could be eligible for up to $1,200 a year in savings on debit card processing.

In order to be eligible for savings, you need to ask your payment processor if they are passing along the benefits under the Durbin Amendment.”

It’s a very short piece that essentially suggests contacting your payment processor for more information about savings. But it does include the statistics about the cap the Durbin Amendment brings to debit card swipe fees (the previously reported 24 cents on the average purchase) as well as the cost of swipe fees in the past year (the also previously reported 44 cents on the average purchase). Which underscores how much of a difference the Durbin Amendment is forcing on the individual transactions.

These articles give three different perspectives on the Durbin Amendment: Bank, Consumer and Merchant. And gets right to the heart of the issue: Where will the savings that the legislation was designed to create actually end up going? Banks are making moves to protect the huge profit margins the fees provided them prior to the regulation. Merchants are capable of getting some savings, but it hinges on what their payment processors can do. And consumers may end up having to pay the same amount as fees get shifted to other, unregulated areas in the infrastructure of bank services.