Following the passage of the Durbin Amendment, which capped the amount financial corporations could charge merchants for debit card processing, many retailers were looking forward to saving considerable money.
The Washington Post reports that since the law took effect on October 1, merchants have saved many millions of dollars thanks to a cap of approximately 24 percent. The source reports that Heartland Payments Systems said that as a result of the new cap on interchange fees, its clients have saved more than $30 million.
However, some have worried about the loopholes in the law, and believe that the credit card firms will do everything in their power to make up the billions of dollars they’re expected to lose.
“Unfortunately, we should not expect these savings to last for two reasons: 1) There are more holes in the Durbin Amendment than Swiss cheese and 2) large banks are expected to lose $9.4 billion in interchange revenue annually as a result of this law,” the source reports.
The legalisation’s namesake, Senator Dick Durbin, (D-Illinois), has been making other news when it comes to the retail sector. Durbin is one of the proponents of U.S. Senate Bill 1832, which imposes a sales tax on online merchants and merchant services providers.Back To Blog