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Durbin Amendment

If you haven't heard of the Durbin Amendment, then there is a good chance your merchant services provider is taking advantage of you!...

Congress initiated the Durbin Amendment in August 2011 in an attempt to help consumers and merchants alike. Unfortunately, Congress does not seem to understand the credit card industry; the Durbin Amendment regulates and limits interchange fees (buy rates that Visa/Mastercard charge the merchant account providers), and not the fees merchants pay to their merchant account providers. While your merchant account provider will not have to pay more than the capped debit interchange fee, the provider DOES NOT have to pass any fee reductions to you, the merchant. Many merchants will never see a penny of the reduction, allowing their service provider to keep all the additional profit. Imagine an auto dealer buying Toyota Carollas from the factory for $20,000 and selling them for $25,000, then Congress passes a law forcing the factory to sell Carolla's to the dealer for $15,000, but the car dealer continues to sell them for $25,000. That's exactly what MOST merchant providers are doing. Your merchant provider SHOULD HAVE contacted you via mail or email to notify you that your costs have decreased as a result of Durbin. Personally, I called all of my clients to inform them of their lower rates, but not every account manager is as nice as me :) Like I said earlier, if you have never heard of the Durbin Amendment, there's probably a very good reason... Your merchant provider doesn't want you to know that they are keeping your potential savings as profit!!!