Durbin Amendment Webinar

May 10, 2012Download as ppt, pdf0 likes716 views

This webinar will show you how to save on your credit card processing and how the Durbin Amendment affects your business

The Durbin Savings
A Practical Guide to cut your credit card
processing charges

This webinar will show you how to save on your credit
card processing and how the Durbin
Amendment affects your business

Biggest Reduction in History of
Electronic Payments

Small businesses received the biggest reduction in their credit
card processing charges in the history of the electronic
payment industry.

The Durbin Amendment
A Part of the Dodd – Frank Wall Street Reform and Consumer
Protection Act of 2010

The Durbin Amendment gave the Federal Government the power to set
interchange rates for debit card usage.

Durbin Amendment went into effect in October, 2011

Regulated Interchange Rate
Interchange + Visa/Mastercard Assessment fee + Processor Fee =
Discount Rate

Interchange is the cardholder bank fee charged to the merchant. It is
one of 3 components that make up the merchant’s discount rate.

Durbin regulates interchange rates, NOT the discount rate.

Debit Cards

Check cards and ATM Cards = Debit Cards
Debit cards are directly linked to the cardholder’s bank account.

Two Types of Debit Transactions

Signature Debit Vs. Pin Debit

A signature debit transaction is like a credit card transaction,
which requires a signed receipt and no pin number entry. This
results in a less secure transaction, but lower cost due to Durbin.

Pin Debit transaction requires a the customer’s pin number entry
and no signed receipt. This results in a quicker and more secure
transaction, but more expensive for the merchant.

Durbin Interchange Reduction

Before Durbin:
Visa Interchange: 0.95% + $0.20
Mastercard Interchange: 1.05% + $0.15

After Durbin:
95
Visa Interchange: 0.05% + $0.22 Reduction
Mastercard Interchange: 0.05% + $0.22

Debit Card Usage
Purchase, transaction volume in U.S. (Through Dec. 31, 2011)

• Visa debit purchase volume: $1.15 trillion (Source: Visa.com)
• Visa debit transaction volume: 30.7 billion (Source: Visa.com)
• MasterCard debit purchase volume: $393 billion (Source:
MasterCard.com)
• MasterCard debit transaction volume: 9.85 billion (Source:
MasterCard.com)

Debit Card Usage by Industry

% of Debit
Industry
Transactions

QSR Quick Serve
Restaurants 65.93%
Automobile Rentals 64.23%
Bars 60.68%
Restaurants/Eating
Places 46.77%

Savings Per Transaction
Avg. Trans $100.00
Old Rate 1.05% $0.15

Total $1.20

Avg. Trans $100.00
Durbin Rate 0.05% $0.22

Total $0.27

Savings $0.93 per trans.

How to take Advantage of Durbin

• Get Several Competitive Quotes from multiple processors

• Switch Processors: send a message to the banking industry. You
will no longer tolerate its deceptive behavior.

• Get Interchange Plus Pricing

• Ask for Durbin Savings

Most Popular Types of CC Pricing

Three Tier
• Qualified, mid qualified, and non qualified
• Pros: Simplified pricing
• Con: Transactions easily manipulated to higher tiers

Billback
• One rate + additional % for non qualifying transactions
• Pro: Simplified pricing
• Con: Small percentage of transaction qualify for the low one rate.

Most Popular Types of CC Pricing

Interchange Plus (Pass thru)
• Dynamic interchange rate + V/MC Fee + Processor Fee
• Pro: Lowest transaction cost for each transaction type
• Con: Confusing with over 400 possible interchange rates.

Interchange Plus Pricing

Unless you know for certain the card types accepted at your
business, then Interchange Plus Pricing is the most cost
effective plan.

All the Fortune 500 companies are on Interchange Plus
Pricing.

Summary
• Durbin Amendment reduces the debit interchange rate by 95%.

• 50% of all transactions are debit transactions.

• Take advantage of Durbin by switching processors by getting
multiple quotes.

• Be set up under Interchange Plus pricing

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Durbin Amendment Webinar

1. The Durbin Savings A Practical Guide to cut your credit card processing charges This webinar will show you how to save on your credit card processing and how the Durbin Amendment affects your business

2. Biggest Reduction in History of Electronic Payments Small businesses received the biggest reduction in their credit card processing charges in the history of the electronic payment industry.

3. The Durbin Amendment A Part of the Dodd – Frank Wall Street Reform and Consumer Protection Act of 2010 The Durbin Amendment gave the Federal Government the power to set interchange rates for debit card usage. Durbin Amendment went into effect in October, 2011

4. Regulated Interchange Rate Interchange + Visa/Mastercard Assessment fee + Processor Fee = Discount Rate Interchange is the cardholder bank fee charged to the merchant. It is one of 3 components that make up the merchant’s discount rate. Durbin regulates interchange rates, NOT the discount rate.

5. Debit Cards Check cards and ATM Cards = Debit Cards Debit cards are directly linked to the cardholder’s bank account.

6. Two Types of Debit Transactions Signature Debit Vs. Pin Debit A signature debit transaction is like a credit card transaction, which requires a signed receipt and no pin number entry. This results in a less secure transaction, but lower cost due to Durbin. Pin Debit transaction requires a the customer’s pin number entry and no signed receipt. This results in a quicker and more secure transaction, but more expensive for the merchant.

7. Durbin Interchange Reduction Before Durbin: Visa Interchange: 0.95% + $0.20 Mastercard Interchange: 1.05% + $0.15 After Durbin: 95 Visa Interchange: 0.05% + $0.22 Reduction Mastercard Interchange: 0.05% + $0.22

8. Debit Card Usage Purchase, transaction volume in U.S. (Through Dec. 31, 2011) • Visa debit purchase volume: $1.15 trillion (Source: Visa.com) • Visa debit transaction volume: 30.7 billion (Source: Visa.com) • MasterCard debit purchase volume: $393 billion (Source: MasterCard.com) • MasterCard debit transaction volume: 9.85 billion (Source: MasterCard.com)

9. Debit Card Usage by Industry % of Debit Industry Transactions QSR Quick Serve Restaurants 65.93% Automobile Rentals 64.23% Bars 60.68% Restaurants/Eating Places 46.77%

10. Savings Per Transaction Avg. Trans $100.00 Old Rate 1.05% $0.15 Total $1.20 Avg. Trans $100.00 Durbin Rate 0.05% $0.22 Total $0.27 Savings $0.93 per trans.

11. How to take Advantage of Durbin • Get Several Competitive Quotes from multiple processors • Switch Processors: send a message to the banking industry. You will no longer tolerate its deceptive behavior. • Get Interchange Plus Pricing • Ask for Durbin Savings

12. Most Popular Types of CC Pricing Three Tier • Qualified, mid qualified, and non qualified • Pros: Simplified pricing • Con: Transactions easily manipulated to higher tiers Billback • One rate + additional % for non qualifying transactions • Pro: Simplified pricing • Con: Small percentage of transaction qualify for the low one rate.

13. Most Popular Types of CC Pricing Interchange Plus (Pass thru) • Dynamic interchange rate + V/MC Fee + Processor Fee • Pro: Lowest transaction cost for each transaction type • Con: Confusing with over 400 possible interchange rates.

14. Interchange Plus Pricing Unless you know for certain the card types accepted at your business, then Interchange Plus Pricing is the most cost effective plan. All the Fortune 500 companies are on Interchange Plus Pricing.

15. Summary • Durbin Amendment reduces the debit interchange rate by 95%. • 50% of all transactions are debit transactions. • Take advantage of Durbin by switching processors by getting multiple quotes. • Be set up under Interchange Plus pricing

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