New Survey Reveals If CNP Merchants Will Pass Durbin Savings onto Consumers

September 2, 2011

Approximately 41% of card-not-present merchants who participated in a survey at the Direct Response Forum’s annual conference earlier this month in San Diego said they do not plan to pass on lower debit card costs to consumers, according to Digital Transactions.

Fifty-six percent of the 169 respondents, meanwhile, said they had not yet decided on a course of action. Conference attendees included leaders from Ancestry.com, Comcast Cable, L.L. Bean, Rosetta Stone and ShopNBC.

“With the survey results from the DRF, however, it remains unclear just how much consumers who buy from catalogers and online merchants will benefit,” points out Digital Transactions. “At the same time, industry observers have pointed out that merchants themselves may not receive the full benefit of the Fed interchange cap, since some acquirers may not pass on the full amount to their merchant clients. Even so, competition in the acquiring business is expected to compel most acquirers to pass on all or most of the benefit over time, observers say.”

The DRF survey also revealed that many CNP merchants aren’t aware of how much of their sales comes from cards.

“While one-fifth of responding merchants said that up to 60% of their sales come from the plastic, another 26% said they did not know,” continued Digital Transactions. “Twenty percent said they get up to 20% of sales from debit, while 28% said debit accounts for up to 40% of their business.

When questioned about the affect Durbin will have on their operations, 43% of participants responded “moderate” or “significant.” The survey also indicated that merchants top three concerns are 1) interchange fees, 2) broadening the options for alternative payments and 3) fraud and the Payment Card Industry data-security standard (PCI). In the 2010 survey from the conference, the top three concerns were interchange, PCI, and chargebacks.

“Security concerns are also top of mind,” added Digital Transactions. “Asked if they are ‘comfortable that the mobile-payment options offer a secure credit card environment,’ 40% answered ‘yes,’ while 24% responded ‘no’ and another 36% said they don’t know… Some 43% said they plan to deploy a mobile-payment solution within the coming 12 months, while another 11% said they already have one”

Click here to read the full article and more details on the survey results.


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