As you may already be aware, the Durbin Amendment to the Dodd Frank Act, went into effect on October 1st. This legislation directly addresses debit card transaction fees and the caps that have now been levied. Now, no matter how debit cards are processed in your business, the maximum fees that will be charged to your processor is $.21 + .05% ( and in some cases for issuers that provide additional security measures, there can be an additional $.010). Now, make sure you totally grasp those figures. These are what the processor will be charged for processing those transactions but what you are being charged can vary widely.
There are also some caveats to the fees discussed above. These “maximums” referred only apply to those banks that are considered “regulated” which means they have assets in excess of $10 billion. Non-regulated banks do not have a maximum on debit/check cards. Currently, there is no “list” available of which banks are regulated and non-regulated. However, I’m certain that if one felt so inclined, thorough research on the internet could probably provide some information for you. But, is this something that you really want to pursue? I didn’t think so.
Let’s discuss debits a bit more to give you a better understanding. If you are on any kind of tiered pricing model, you will never know exactly what you are being charged for swiped debit cards. Your processor can place them in any of their categories, or tiers, that they deem appropriate. This is good for them and, of course, not so good for you as the merchant. The only way you will ever know for sure, what these, or any of your card transactions are costing you, is to be priced on Cost-Plus or Interchange-Plus pricing. I’ve written on this many times before but just to reiterate, Cost-Plus pricing is the most transparent form of pricing and the best way to more fully understand all your costs. If your business is not currently priced this way, change processors now but, make sure to do your own due diligence in the process. As a semi-retired merchant services rep, I have the desire, as well as the availability to help you in this endeavor. And, as you might imagine, with an already sizeable portfolio, and living the good life, I don’t need to make much off of any new merchants. So, get in touch with me if you’d like to see how I may be of service to you. Thanks for coming by.