Did the Durbin Amendment Make a Difference?

October 15, 2014, Written By John H. Oldshue
Close-up of payment machine while human hand keeping plastic car

The Durbin Amendment contained a provision that limited the interchange fees merchants paid for debit card transactions. The thought was that retailers would lower their prices if these high swipe fees were decreased.

But on the third anniversary of this Amendment, the Electronic Payments Coalition issued results of a survey which showed consumers have not seen any price declines as a result of the cap.

The survey, which asked 3,400 consumers about price changes, showed 94% of consumers have seen prices increase or remain the same in the 16 categories measured in the survey. In addition, a majority of consumers have seen prices increase at pharmacies, home improvement stores, supermarkets, restaurants and gas stations.

Furthermore, the Coalition found 16% of consumers experienced retailers imposing surcharges for debit card purchases, even with the cap in place.

“When Congress interferes in a fight between two industries over who pays what, it is almost always consumers who lose,” Camden R. Fine, president and CEO of the Independent Community Bankers of America, said in a statement.

The Electronic Payments Coalition reports the ruling has saved merchants more than $24 billion since 2011, but that savings has not been passed down to consumers. A study published in June showed the average swipe fee was reduced by over 50%, from 50 cents to 24 cents per transaction. Companies that continue to add surcharges to their transactions are now making even more money from these transactions while paying less in processing.

The merchants won big with the Durbin Amendment, but it looks like this had no benefit to consumers.



The information contained within this article was accurate as of October 15, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.