Quick & Dirty on the Durbin

The Durbin Amendment, a component of the Dodd Frank Wall Street Reform Act, is new law that goes into effect October 1, 2011, that in the simplest terms is intended to reduce the amount you, the business owner, pay for debit card transactions. 


While we have heard of many different reactions inside the Merchant Services industry to this act in terms of pricing adjustments and sales tactics, please know that by law it's provisions apply to all merchant accounts nationwide and you should not have to make any adjustments to your account to see the benefits. 


Here's how it breaks down. For PIN Debit and Signature PIN Debit, or debit card transactions in which the card holder enters their pin number, transactions rates are capped at:


$0.21 transaction fee + .05% (AKA 5 basis points - ex. - for $1000 transaction .05% is $5) + $0.01 for card issuers with verifiable fraud prevention efforts.


For offline, or non-pin debit transactions (cases where the card is recognized as debit but the cardholder does not enter their PIN number, the rates are capped at:


.05% basis points + .11% dues and assessments + $0.21 transaction fee + $0.01 for card issuers who demonstrate fraud prevention efforts. 


If you have any questions about how this works, regardless of your processor, we're here to help. 
Please email dallasg@the-fta.org with any questions I'll be happy to help in any way I can.