Will debit only Interchange regulation back fire?
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