Debit Card Swipe Fees Have Dropped Dramatically

Debit Card Swipe Fees Have Dropped Dramatically

March 5, 2013         Written By John H. Oldshue

The Federal Reserve has issued a report on the effect on the Durbin Amendment which shows a drastic reduction has taken place in debit card interchange fees. As a result, the Federal Reserve does not plan to take any further action to alter these swipe fees.

The Durbin Amendment was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The goal of the Amendment was to make swipe fees on debit cards reasonable and proportionate to the actual cost of processing a transaction by limiting the amount a financial institution could charge. The Amendment did not apply to debit card issuers with assets less than $10 billion.

The report found that the average swipe fee at banks covered by the Durbin Amendment decreased to 24 cents per transaction during the final quarter of 2011, a decline of 52 percent from the 50 cent average which took place during the first nine months of that year.

For the banks not covered by the Amendment, issuers received a swipe fee that averaged 43 cents per transaction during the last three months of 2011, which was a 4 percent decline from the first nine months of that year.

The Federal Reserve issues this report every two years. The last report covered 2009.

The report also found a number of other facts about debit card transactions in the United States:

  • There were 46.7 billion debit card transactions processed in 2011, a 24 percent increase over 2009. The total volume of these transactions was $1.82 trillion, 27 percent above two years ago.
  • 63 percent of these debit card transactions were signature-based, 37 percent were PIN-based.
  • Prepaid debit cards are skyrocketing in popularity. Both the number and value of prepaid card transactions reported by networks more than doubled in two years. In 2011, prepaid cards represented 2.43 billion transactions valued at $83.6 billion.
  • Despite this growth, the prepaid card transactions represented just 5.2 percent of all debit card transactions.
  • Debit card fraud is projected to be $1.38 billion in 2011. The great majority of this fraud, 82 percent or $1.13 billion, comes from signature-based transactions. PIN-based fraud totaled $204 million while prepaid card fraud losses were $51 million.
  • The incidence of debit card fraud decreased in the past two years, from 0.4 percent of debit card transactions in 2009 to 0.3 percent of transactions in 2011.
  • Costs for cardholder inquiries not related to fraud averaged 4.4 cents per transaction for covered issuers.

The information contained within this article was accurate as of March 5, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
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