Will The Durbin Amendment Be Repealed?

Mar 28, 2017

The Durbin Amendment, Section 1075 of the Dodd–Frank Wall Street Reform and Consumer Protection Act, required the Federal Reserve to limit fees charged to retailers for debit card processing.

Durbin Amendment

For merchants, Durbin is acceptable. The amendment’s interchange price cap affects card issuers with more than $10 billion in assets, which enables merchants to pay less in debit card acceptance costs. For debit card issuers, which receive the interchange paid by merchants, Durbin is unacceptable.

Republicans opposed Dodd-Frank in 2010. Now it’s expected some changes would be made to the amendment or it could be abolished. Repealing the Durbin Amendment is among this year’s priorities of the Financial Services Roundtable, the Washington, DC-based national lobbying group for big financial institutions.

According to the FSR’s statement, the distortion of the free market has led to price reductions, as promised by merchants, for consumers and there has been a decrease in certain banking services like free checking and debit rewards.

Alison Hawkins, the FSR’s vice president of communications notes they are for the repeal of the entire Durbin Amendment. According to Hawkins, the government shouldn’t have used the price controls and the manipulation of transaction routing to intervene into the operation of the payments system and negotiations between private parties.

The Durbin Amendment for Merchants

While talking about the Durbin Amendment and its possible changes, it’s important to mention that emerchantbroker.com, the top high risk payment processor in the US offers the lowest possible rates in the industry. EMB can get you a secure and affordable high risk merchant account to help you grow and succeed.

According to the Durbin Amendment, every debit card should offer a merchant to choose between at least two unaffiliated debit networks with each transaction. This means the majority of US debit cards can get access to the brand of a global network like Visa or MasterCard displayed on the front of the card for transactions requiring a signature, and an electronic funds transfer network like Shazam for transactions requiring a PIN.

The debate about transaction routing has been limited mostly to financial institutions and merchants. Many merchants are for the Durbin routing requirements.

According to Senator Dick Durbin, repealing swipe fee reform would have an awful effect for Main Street merchants, consumers and competition. It would be a huge $8 billion-per-year giveaway for Visa, MasterCard, Wells Fargo and other big banks at the expense of local grocery stores, gas stations, retailers and the customers who support them.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.