Archives / 2011 / March
  • Will debit only Interchange regulation back fire?

    More evidence that the ill-conceived debit only Interchange regulation may back fire for small merchants this week comes from the MasterCard blog.

    In a post, The Durbin Chickens Start Coming Home to Roost we find this quote “What banks’ shying away from debit rewards is likely to do is shift volume away from debit cards to credit cards for those who pay with plastic.” Of course as merchants well know, credit and reward credit Interchange is substantially higher than debit Interchange today.

    In December 2010 when the Fed issued a proposal to set a price cap on debit card Interchange fees under new powers from the Dodd-Frank Act, we warned that “without a compelling financial incentive to develop debit that issuing resources will move away from this product line. … more

  • Banks change business models in response to regulations

    New reports about ways banks will react to the Fed's proposal to cap signature and PIN debit rates continue to emerge.

    According to the Wall Street Journal, U.S. banks are debating letting debit card transactions bounce like checks. And banks may charge more to merchants in order to guarantee debit card payments. While consumers could face bounce fees like they do for checks. Both developments could steer use away from debit cards to other forms of payment not regulated by Dodd-Frank.

    In addition it was recently reported that banks are considering a $50 cap on debit card purchases.

    Merchants that have relied on ATMs in store to avoid taking credit and debit card payments may soon find this strategy of steering customers to cash more difficult to implement as banks begin to increase ATM … more

  • Senate bill introduced to Delay Debit Interchange Regulation

    Senate bill 575 calls for a two-year delay to Fed's debit Interchange regulation. A similar bill is expected to be introduced in the House. Senator Jon Tester (D) who introduced the legislation believes they have the votes necessary.

    Read more at more

  • Banks consider $50 cap on debit card purchases

    With the pending government price controls on debit Interchange fees, as predicted, banks will find ways to steer customer payment choice to higher priced cards. One method under consideration is to limit debit card purchases to a $50 max. In addition, banks may begin charging monthly or transaction fees to use debit cards.

    Read Rules could change how you use debit cards for more information. more

  • VeriFone calls Square's Credit Card Reader Unsafe and Reckless (Video)

    VeriFone has published an An Open Letter to the Industry and Consumers bringing to the forefront the issue of mobile credit card processing security. 

    At issue is the ability for criminals to use unencrypted card readers to steal full mag-stripe data which can then be use to make fraudulent purchases.   Fraudulent card use is a problem for all merchants (and in particular card not present e-commerce merchants) who shoulder the losses. 

    Square has made headlines shipping hundreds of thousands of free dongles (square card readers that plug into the iPhone jack for swiping cards).  In its announcement, VeriFone demonstrates how promulgating cheap readers enables criminals while making the point that the payments industry needs to take card data security seriously.& … more

  • 5 Small Business Concerns with Debit Interchange Regulation

    Vantage has been following the merchant Interchange rate debate and commenting along the way here on the Vantage ViewPoint blog. And that viewpoint is from the perspective of the challenges our clients, small business owners and entrepreneurs face. We take our role as a merchant advocate seriously. We believe it is important that the merchant community at least consider points of view that don’t seem to make the headlines in the over all debate.

    First some background. As a merchant services provider, Vantage collects only a very small fraction of the fees merchants pay to perform services ranging from marketing, sales, underwriting, risk management, customer service, terminal services, 24x7 help desk, transaction authorization and settlement, funding, statement reporting, PCI … more

  • Helps Small Business with Interchange Pricing

    Merchant Rates, a service of Vantage Card Services, was originally launched in December of 2000. For over 10 years now, has been providing instant merchant Interchange rate quotes!’s latest release is faster and more secure than ever. The user experience has been enhanced with updated content, new solutions, better organized Interchange rates by industry and the ability to easily generate and compare multiple proposals. is an award-winning small business site featuring:

    On Demand Quote and Proposal in under a minute

    Customized for your business

    Results Delivered Real-Time

    Industry specific Interchange Rate & Fee Schedule

    Ready to Sign Application

    Read complete Month-to-Month Terms

    No Hidden Fees

    Monitor your … more

  • Will Interchange Regulation Push 884 Troubled Banks Over the Edge?

    Will government Interchange regulation push 884 banks on the brink of failure over the edge?

    According to a post, the number of banks on the Federal Deposit Insurance Corp.'s "Problem List" totaled 884. If these institutions are already hurting, will any survive the Feds plan to cap debit Interchange fees?

    The Independent Community Bankers of America speculates that the exemption for small banks (<$10 billion) to the Fed Interchange price cap will fail to protect these institutions for the following reasons:

    As the largest debit issuers, mega banks will influence networks to limit support of dual pricing schemes that make their cards less attractive to merchants.

    Merchants will discriminate against any high-cost cards customers present.

    Debit card … more

by Ty Hardison

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