July 5, 2011
The July 4th holiday may have come and gone, but the debate over the Fed’s final debit regulations is far from over. From questions to impassioned comments, PYMNTS readers have written us to share their thoughts on this pivotal industry ruling. Check out the reactions thus far and then join the conversation!
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The biggest loser is Dick Durbin who had no earthly idea about what he was doing!! – Jack Dale
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Agree with JD – Durbin’s fixation on the “evil” Visa & MC drove this effort as he hardly ever mentioned the various other payment networks (i.e. Star, Pulse, NYCE, etc.) that handle PIN debit transactions that outnumber signature debit in overall transaction volume. Sure his sights will next be on credit card interchange.
Not sure decoupled debit is going to be a winner. DD has been around for more than a decade and has failed to catch on to any degree; primarily due to a lack of guaranteed payment for an ACH payment. If ACH gets real-time authorization capability, that could be a game changer for DD. – Dave L.
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Alternative payment providers, particularly those using the ACH may be the biggest winners. What once sounded like the death bell tolling for Decoupled Debit now sounds more like wedding bells as retailers look for partners to driver a lower cost method of payment. – Peter Guidi
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Well thank you Wal-Mart for sticking it to people worldwide. Now all the fees and services we (the people) were not paying for from our banks will now get nailed. Expect your ATM fees to go through the roof… – Brian
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If banks do raise fees on deposit accounts, consumers are free to shop around to get good value for price — that’s how a competitive market sets prices. Contrast that with the fake market pre-Durbin where V & MC competed to raise swipe fees and the cut diverted to banks, thus competing to RAISE prices to captive merchants and consumers. Durbin doesn’t establish a competitive market, either, but at least it capped this perverse one.
One simple, market-based reform would be to repeal various laws and V/MC rules that prevent stores from surcharging on debit and credit cards. Allowing merchants that option would let a competitive market determine the appropriate fees for these services. – Bob Schwartz
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Stop beating this horse to death. Banks MUST abandon the archaic idea to use the 50-year-old rails for the low-value payments. If they are not capable of that, they should then suffer and fail. – Anonymous
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Too bad the 12 cent cap was foregone. Here in Australia, the RBA enforced a 12-cent cap on debit transactions several years ago (reference: http://www.rba.gov.au/payments-system/reforms/debit-card-systems/reg-decisions.html).
As a result, more merchants encourage the use of scheme debit and EFTPOS (propriety debit) transactions. Banks still make a cut, albeit smaller, but the increased number of debit transactions over the last three years has made up the difference. Statements that bank costs are greater than 12 cents per transaction are false. If Australian banks, in a much smaller market, can make money on a 12-cents per transaction cap, there is no reason U.S. banks should be materially different. – Pete
Industry Experts Dissect Fed’s Debit Proposal during PYMNTS.com Webinar
Durbin Statement on the Final Federal Reserve Rules on Interchange Fees
PayPal Responds to Fed’s Latest Debit Regulations
ABA Statement on Fed Interchange Rule
NRF Expresses Disappointment in Federal Reserve for Watering Down Swipe Fee Reform
Merchants Payments Coalition: Federal Reserve Bends to Bank Pressure
Bloomberg: “How Wal-Mart Trumped JPMorgan on Debit Cards”
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