Durbin Amendment & Flat Rate Processing

About The Durbin Amendment

As part of the Dodd Frank Reform passed by senate in 2010, The Durbin Amendment was put in place for Merchants to enjoy a discount on processing Debit Cards . Thus Regulating the Issuing Banks (Beneficiaries of Interchange) by capping Check Card-Debit Card Transactions at at $0.21cents and .05%. The initial assumptions were that merchants will save big dollars from the decrease in fees given a scenario of an average ticket higher than $20.
However, The What wasn’t mentioned are not only the fact of that merchants current processors will little to none pass the savings along, But also that the issuing banks have increased interchange on nearly every other interchange level.
For example small ticket merchants (Under $20) who previously enjoyed discounted rates already lower than the 22 Cent cap assessed by the Durbin Amendment are now being penalized having to pay the higher cap in the banks efforts to regain loss revenue from the amendment. With all this said the changes to current interchange could end up benefiting merchants if the discounts are passed along properly or this could also open doors for Processors to further Mislead merchants on the different levels of interchange.

Flat Rate Processing was created to offer understanding and piece of mind on the cost of merchant processing. Following the implementation of the Durbin amendment, Banks and Processors have further complicated the total effect of the new law. Yet, Flat Rate has proven its purpose by properly calculating savings for merchants and are able to offer an apparent savings or in other cases minimal losses.

“Example: of calculated savings and Impact on a given scenario. (showing only Durbin Savings, not including what you are already overpaying)”

Based on an average of $30 and 60% check/debit cards: without having to ask for statements and still Again with the ease to calculate what some processors may call “Savings” Flat Rate makes it apparent with the calculations based on the actual savings from by guaranteeing new merchants the a set ratio savings calculated in the average tix and volume of their current processing data.

1. Current fees/current volume = current flat rate
2. Current flat rate – .30% = savings of at least .30%
3. (savings) .30% x credit card volume = the amendment translated in dollars.
Again with the ease to calculate what some processors may call “Savings” Flat Rate makes it apparent with the calculations based on the actual savings from by guaranteeing new merchants the a set ratio savings calculated in the average tix and volume of their current processing data.