Lower debit card interchange fees to challenge all financial institutions
Even small institutions need to consider the impact and speak out.
As lawmakers continue to debate sweeping changes to credit card network requirements, the immediate focus for financial institutions has shifted toward a Federal Reserve proposal that would cut into revenue tied to debit cards.
The Fed is seeking comments on a proposal that would slash covered financial institutions’ interchange revenue by nearly 30%. The proposal, combined with a recent clarification of rules for card-not-present debit transactions, could spell trouble for all debit card issuers.
The 2011 Dodd-Frank Act, which includes the Durbin Amendment, requires the Fed to set interchange limits at a level that is “reasonable and proportional to the cost incurred by the issuer with respect to the transaction.”
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