Small Businesses are Missing Out on Debit Interchange Savings

Small Businesses are Missing Out on Debit Interchange SavingsIn an article yesterday titled “Merchant service providers are the real winners under new debit fee caps”, Michael Conticelli highlights that processors are not required to pass on the lower Fed regulated debit Interchange rates – and because of this small businesses are not realizing the benefits of this legislation.

Thanks Michael for helping call attention to this small business issue. Ever since this debit Interchange debate started we have been advocating for small businesses because we knew that while they were held up as the face of this legislation by mega retailer lobbyist, that the system was rigged against them.

In October 2011 when the Fed debit rules went into effect, we posted "Durbin’s Debit a Trick or Treat for Small Merchants". Michael writes “Some banks and processors have tried to trick their business customers into thinking they are getting the savings passed on by lowering rates at only a fraction of the full savings.” To avoid the tricks, Michael advises “The only way a business can be sure you are getting ALL of the savings passed through is through the Interchange pass through pricing model.”

Two years before, in October 2009, Vantage wrote More Intelligent Merchant Rates, calling for all merchants to move to Interchange pass through pricing. The bottom line we posted “is that while the lawyers, lobbyist and politicians earn their living arguing over Interchange, merchants should take more immediate action on the things they can control today. Shop smart and choose your payment partner wisely.” In fact, since 2005, Vantage has monitored, recorded and reported on Interchange changes impacting merchants. All merchants, large and small, can get Interchange pass through pricing. And Vantage is passing all the Regulated Debit savings on to our clients (and released a study of the results by industry).

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by Ty Hardison

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