It has been almost 9 months since the Durbin Amendment (lowering interchange rates on debit and check cards) went into effect. It is still early to know the full extent of what repercussions the amendment will have but the initial shock and concern regarding how issuing banks might react to such a loss has subsided and the reaction wasn’t nearly as drastic as many had predicted. And to a large extent, the mission of saving money for small business owners was in fact accomplished.
Any merchant who was on an interchange based pricing structure would have seen savings passed through immediately without needing any rate review or adjustment. However, any merchant who had been on a tiered pricing structure would not have seen those savings automatically due to the pricing type. For these businesses, a switch to either an interchange pricing model or pricing a lower check/debit card rate would be necessary in order for those businesses owners to see the savings.
And so, one thing that the Durbin Amendment has done for the credit card processing industry is give a new sales tool to every bankcard sales organization out there. If you’re a business owner, you have undoubtedly received calls where people tell you that you are missing out on savings from the Durbin Amendment and you must allow them to price your account and switch your services in order to qualify for your savings. While this is not entirely true, pieces of it are. You may be missing out on savings. You may allow them to price your account and switch your services if you’d like, but you should also be able to get the same savings without switching.
If you’re not sure about your particular pricing structure, than you may want to contact your processing company or sales office if you used one. You will likely be given a rate review and if you mention the Durbin Amendment, you should get a nice comfortable rate reduction as your processing company will worry about losing your account to an office that will promise you savings from Durbin.