Posted on 02-05-2012
If you haven't heard of the Durbin Amendment, then there is a good chance your merchant services provider is taking advantage of you!...
Congress initiated the Durbin Amendment in August 2011 in an attempt to help consumers and merchants alike. Unfortunately, Congress does not seem to
understand the credit card industry; the Durbin Amendment regulates and limits
interchange fees (buy rates that Visa/Mastercard charge the merchant account providers), and not the fees merchants pay to their merchant
account providers. While your merchant account provider will not have to
pay more than the capped debit interchange fee, the provider DOES NOT
have to pass any fee reductions to you, the merchant. Many merchants
will never see a penny of the reduction, allowing their service provider to keep all the additional profit. Imagine an auto dealer buying Toyota Carollas from the factory for $20,000 and selling them for $25,000, then Congress passes a law forcing the factory to sell Carolla's to the dealer for $15,000, but the car dealer continues to sell them for $25,000. That's exactly what MOST merchant providers are doing. Your merchant provider SHOULD HAVE contacted you via mail or email to notify you that your costs have decreased as a result of Durbin. Personally, I called all of my clients to inform them of their lower rates, but not every account manager is as nice as me :) Like I said earlier, if you have never heard of the Durbin Amendment, there's probably a very good reason... Your merchant provider doesn't want you to know that they are keeping your potential savings as profit!!!
Thanks for adjusting my rates and calling to notify me when this changed, Cameron! I'm going to pass this along to my brother who owns a liquor store. I've been telling him to call you but he's been lazy. Hopefully he'll take time to speak with you because I know you'll be able to help him just like you did with me! Keep up the great posts!
Thank you for posting this! This is the exact reason I called you guys! My bank, Wells Fargo, did not lower any of my costs in the last year (or ever, for that matter), so I am switching companies. I spoke with you sales rep, Andy, last week and he's saving me just under $300/month so it looks good!!! Thanks!