The Durbin Amendment of the Dodd-Frank Act: Debit Card Payments

The Morning Consult has conducted a national survey with the correspondent of over the summation of 1,999 registered voters, residing in the United States of America right from the 13th of October this year, and came up with the data that outrageously tells that there are more than six out of ten consumers that probably wanted to revoke of the merchant markup in which was fully known as the Durbin Amendment of the Dodd-Frank Act.

As a fraction coming from the 2010 Dodd-Frank Act, in which was the Durbin Amendment a lesser debit card interchange cost of fees, in which charges that particular stores to pay the banks every single moment that a customer uses their debit card to pay or to make a purchase in which may probably cost the consumers as an estimated amount worth of $4 billion, annually.

Based with the Federal Reserve that a transaction involves the five main parties in which were the consumer, the consumer’s bank in which pertains with the issuer, the merchant, the merchant’s bank in which pertains with the acquirer, and lastly, the card network. The card provider bank offers the card reader technology and also the processing activities right to the merchant. And the network creates the policies right for the card transactions and therefore coordinates the transmission of the information and the funds between the two banks.


Right in the debit transaction, the interchange cost of fees was being paid by the acquirer to the issuer and it is commonly deducted right from the amount transferred from the issuer to the acquirer upon settling. The interchange cost of fee schedules are being scheduled are being set by the network that carries transactions in particularly with the Visa, MasterCard, or even one of the PIN debit networks. As prior to the Federal Reserve Board in which was issued-Reg. II in the year 2011, June to be able to fully implement the Durbin Amendment, the interchange cost of fees were being set at the amount of $0.48. Right then, the Board clarifies that, “Under the supervision of the regulation that was imposed on the 11th of October year 2011, the interchange cost of fees right for the issuer together with their assets being greater the summation of over the amount of $10 billion were capped at the total amount of 21 cents plus the 0.05% of the transaction value. It is totally reflecting a provision of the bill, and Reg II further permits the covered issuers to be able to receive a 1 cent adjustment right for the fraud prevention costs. And together with the interchange cost of fee cap and the fraud-prevention adjustment entailed a maximum interchange fee of 24 cents for the summation of $38 debit card transaction in which is a decline of a 45% right from its average value of 44 cents for the very exact and the same transaction in the year 2009 as prior with the Durbin Amendment of the Federal Reserve Board 2011b.”

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