Fed survey reveals new state of affairs for debit issuers
For FIs not subjected to EFT caps, the average interchange fee for debit transactions on single-message networks has continued to fall since 2011.
PIN debit interchange fees are falling and fraud losses are rising, according to new data from the Federal Reserve.
The agency’s latest survey of interchange revenue, out this month, found that for many credit unions and other financial institutions not subject to the Electronic Fund Transfer Act’s interchange cap, the average interchange fee for debit transactions on single-message networks (typically PIN transactions) has continued to fall since the cap took effect in 2011. In 2017, it was $0.25, compared to $0.31 in the fourth quarter of 2011. However, fraud losses for all debit and prepaid card transactions rose to $11.20 for every $10,000 in transaction value in 2017, up from $10.30 in 2015.
Card use has nonetheless been booming, according to the report.
“For the past eight years, the volume of total card usage has grown steadily from 37.6 billion transactions in 2009 to 68.5 billion transactions in 2017, with an average growth of 3.86 billion transactions per year,” it said. “The total value of purchase transactions also exhibited growth, increasing from $1.43 trillion in 2009 to $2.62 trillion in 2017, with average growth of $0.15 trillion per year.”
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