Last June, in an article titled “The End of Interchange“, I wrote about the then yet to be passed Durbin amendment – and how it might affect debit interchange fees. Earlier today, we got the first glimpse.
The point of my earlier article was focused on the “sleeper” – as I described it – in the debit interchange discussions then underway. Namely, whether card present vs. card not present interchange would be affected differently by any Fed action.
Now we know. The Fed’s action today ignored any distinction between the two – in spite of the long distinction that the card networks have made between the two different acceptance environments – the acceptance environment (CP vs CNP) doesn’t matter – debit interchange will be considered uniformly. eCommerce merchants seemingly benefit disproportionately as a result.
Fascinating – for us “payments geeks”! There’s also no distinction in the Fed’s language between interchange fees for signature vs. PIN debit.
While today’s Fed actions aren’t the definitive action – pending lots of comments from all manner of industry participants – we did get a clear indication of the Fed’s thinking.
Whether or how the new Congress might re-enter these issues is yet to be seen.
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How will the proposed Durbin rules impact your payments business? Glenbrook can help you assess the impact and recalibrate your strategy – learn how here.