The Consequences of Debit Interchange Price Fixing

Size: px
Start display at page:

Download "The Consequences of Debit Interchange Price Fixing"

Transcription

1 The Consequences of Debit Interchange Price Fixing Overview The Durbin Amendment has established a price fixing scheme for debit interchange, implemented by the Federal Reserve. Banks will be forced to offer debit card services to retailers at sharply below cost. The beneficiaries will be giant retail chains, as 1.5% of merchants account for over 80% of debit transaction volume (and the top 100 merchants alone account for 50% of the debit transaction volume). The corresponding harm will fall largely on consumers, as (1) there is no requirement or expectation that retailers will pass along their $14 billion windfall to their customers; and (2) banks, forced to lose money on debit interchange transactions, will be forced to compensate by increasing fees for deposit customers. In effect, consumers will end up paying for a payments system that provides retailers with extraordinary value. Prior to the Durbin Amendment, Congress had not enacted price control legislation for many years. Not only is such legislation inconsistent with basic American free enterprise principles, but it has generally proven to be a failure, producing unintended consequences, stifling innovation and competition, and harming the very consumers the legislation was designed to protect. Discussion The Durbin Amendment instructs the Federal Reserve to set the price that banks and credit unions can charge for debit interchange services. The Federal Reserve s proposed rule does not take into account all of the costs of providing banking services but, rather, only allows banks and credit unions to recover their incremental costs of authorizing, clearing, and settling debit card transactions, with a potential allowance for fraud prevention costs. This is blatant price-fixing in a business-to-business setting that prohibits banks and credit unions from recovering the value they create, or even the actual and reasonable costs they incur, in providing key banking services. Acting under the Durbin Amendment, the Federal Reserve s proposed rule would fix debit interchange fees regardless of transaction size at 7-12 cents per transaction, roughly 80% below today s fees and far below what it costs banks and credit unions to provide basic debit card services. There is no business that can survive being restricted to charging only incremental costs for its goods or services. For example, if the government restricted a restaurant s food prices to what it paid for ingredients and labor, without allowing the restaurant to take into consideration other expenses such as rent, utilities, marketing or management, that business would fail. Banks will lose about 80% of the debit interchange revenue that supports the entire deposit account relationship, and as a result the offsetting cost increases to consumers will be significant. While the primary effect on consumers will be higher prices for banking services, there will also be secondary effects. Many customers will not be able to afford these cost increases and will drop out of the banking system. Payday lender stocks continue to rise, as it becomes clear that the Durbin amendment and other recent Congressional actions will drive bank customers to them. In sum, the Durbin Amendment undoes a generation of hard work to reduce the ranks of the unbanked.

2 There will be other negative secondary effects for consumers such as decreases in service and innovation - because banks are unable to pass along their actual costs. In enacting the Durbin Amendment, many members of Congress were led to believe that small banks and credit unions would be exempted from the harm of debit card price fixing. This is not correct. It is not possible to shield credit unions or small banks from the economic damage created by the Durbin Amendment this is why small banks and credit unions continue to oppose vigorously the Durbin Amendment and the Fed s proposed implementing rule. 1. Products and services should be priced based on value provided not some artificial concept of cost. a. The Durbin Amendment is blatant price fixing that fixes prices based not on value provided or even full and fair costs but, instead, on an artificial and incomplete measure of incremental cost. The Durbin Amendment s limited definition of incremental costs has no economic validity as a pricing metric AND will prevent banks and credit unions from recovering their fair and reasonable costs. b. Retailers have benefitted enormously from the value that banks and credit unions have created in debit card networks by fully embracing and accepting the widespread use of debit cards and by benefiting from the higher sales generated by the proliferation of debit cards. Retailers are not required to accept debit cards but have chosen to do so because they benefit from them in multiple ways. c. Because of the wide usage of debit cards, many retailers have been able to change their business to lower costs and increase sales. For example, grocery stores, big box retailers, gas stations and other merchants have benefited from self-service check-out. d. Consumer adoption of debit has been rapid and significant, and as a result the use of checks and cash has decreased enormously, resulting in a significant reduction in check processing infrastructure and costs. e. Retailers also benefit from the ease with which consumers can access their funds and pay for products and services more quickly; from the ability of retailers to process payments quickly and efficiently, at little or no risk; from lower fraud losses; from faster service to customers; and from faster credit for sales. f. Entire categories of merchants, such as internet retailers and airlines, depend almost exclusively on debit and credit cards. Approximately $1 for every $10 spent on debit cards is spent when the card is not present for the transaction. g. Retailers have a choice as to what form of payment to accept, and many retailers, including grocery stores, have stopped taking checks altogether to reduce costs. Some do not even accept cash (e.g., many parking garages and many airlines for in-flight purchases only accept cards, etc.).

3 h. Retailers argue that cash and checks clear at par, with no additional transaction costs, and debit cards should be priced in the same way. It is simply not true that cash and checks do not have transaction costs. Merchants bear significant costs when processing cash and checks, including the cost to move and store cash and checks, security and insurance, robberies, cash handling fees and fraud. It has been shown through many different studies that it costs merchants basis points to process a cash transaction and basis points to process a guaranteed check. i. The Durbin Amendment s fundamental flaw is that it does not allow for credit unions and banks to capture the value that debit cards create. This type of government intervention into business-to-business dealings creates a dangerous precedent. 2. Definition of costs in Durbin Amendment is incomplete and flawed. a. Debit cards are an innovative payments product that have achieved widespread acceptance in a competitive marketplace and are an important part of the broader checking account relationship. The pricing for the debit card product should not be fixed by the government, but rather by the free market. b. Banks and credit unions expend enormous amounts of money to acquire, maintain and service checking accounts, which are prerequisites for a debit card. Revenues from debit interchange are one way banks and credit unions support the costs of these products and services. c. Revenues from debit interchange allow banks and credit unions to provide a number of free and integrated services including: free statements, free 24/7 customer service, free on-line banking and bill pay, unlimited access to bank branches and ATMs, rewards programs, 100% fraud protection on debit transactions, and similar services in addition, of course, to free debit cards themselves. All of these services encourage consumers to use their debit cards, to the benefit of merchants. Without reasonable debit interchange, banks and credit unions logically and appropriately will be required to charge consumers for these services. d. The Durbin Amendment instructs the Federal Reserve to consider the incremental costs of authorizing, clearing, and settling debit card transactions. The data recently collected by the Fed shows that these costs are only 17% of the total cost per debit card transaction. e. The proposed rule would not allow banks to recover many costs currently covered today by interchange such as funding costs, overdraft losses, fraud prevention costs, fraud losses, billing and collection, customer service, data processing, protection of consumer data, compliance costs, card production costs, and statement production and mailing. f. Checking accounts cost banks and credit unions $ annually per customer. Although these costs include those necessary to support debit card programs, most of these costs, including fraud losses, are excluded

4 from the definition of costs the Fed may consider in its rule. For example, in 2009 the industry incurred approximately $1.4 billion in fraud losses related to debit card transactions, but will not be able to recover any of these costs under new fixed interchange fees. 3. Consumers will see higher prices and new restrictions on banking services. a. To cover the costs that merchants pay now for the benefit of accepting debit cards, banks and credit unions will be forced to increase fees, charge for services that are now free, and limit ways consumers may use their debit cards. i. The Fed s proposal caps debit interchange fees at 7-12 cents, regardless of transaction size. Yet banks must generate a considerably higher level of revenue from interchange fees to support their consumer products and services. If they can t, banks and credit unions will need to charge significantly higher fees to cover their costs of providing basic banking services and/or charge for services that currently are provided for free. Interchange regulation in Australia has led to higher fees and fewer rewards for consumers with no conclusive evidence that consumers have seen any savings. The result will be a $14 billion wealth transfer from consumers to the country s largest merchants. ii. Additionally, large debit purchases may become prohibitively expensive for banks and credit unions to offer due to the risk of higher fraud losses on larger transactions; hence, some banks may restrict debit cards to low-dollar purchases. iii. Debit cards may be restricted in other ways. Merchants who take card information over the internet and phone, where fraud costs are higher, may no longer be allowed to accept debit cards for those transactions. Or banks and credit unions may eliminate or limit the guarantee merchants currently receive on authorized debit transactions. iv. Consumers have come to depend upon the convenience and safety of accessing funds in their checking accounts in millions of locations, in attended and unattended transactions, 24 hours a day, seven days a week. Transaction pricing at the levels contemplated by the Durbin Amendment could result in major disruptions to the current working of the worldwide payment system. 4. Many Americans will not be able or willing to pay for higher cost banking services, and may well be forced out of the mainstream banking system. a. Middle-income and working-class Americans will not be able to or willing to pay costs for banking services, and lower-income Americans will be forced out of mainstream banking due to higher costs.

5 b. These customers most likely will be forced to resort to more expensive and less regulated check cashers and payday lenders for banking services (and be more impacted by pricing changes described above in 2c). 5. Price fixing will reduce innovation, and lead to a less safe and secure payment system. a. The financial services industry has invested billions of dollars over many decades to build an infrastructure that facilitates the use of payment cards on a global basis and has effectively migrated trillions of dollars worth of transactions from paper to electronic form. b. Fixing prices at 20% of current rates will stifle any future investment and innovation that benefits consumers and merchants (e.g., mobile payments, guaranteed fraud protection, photo card, contactless payments, account alerts, etc.). c. Additionally, because debit cards will potentially have more limited acceptance (e.g., low dollar transactions at only certain merchant types), customers will be forced to use higher risk payment methods (e.g., cash and check). In addition to price fixing, the Durbin Amendment instructed the Federal Reserve to require banks and credit unions to process debit card payments on multiple networks and enable or allow merchants, not customers, to choose which network to use for any payment. These changes will: o Significantly reduce debit interchange for smaller banks and credit unions, which are not exempt from these requirements. o Further and unnecessarily increase costs for customers and small to midsize businesses because to comply with this unnecessary mandate, banks and credit unions will be required to invest in new and duplicative technology, systems, risk management tools and other infrastructure and small businesses will have to invest in infrastructure upgrades. o Potentially increase fraud and compromise data security in an unprecedented era of cyber attacks and coordinated efforts to steal and misuse cardholder data and identity as banks and credit unions are required to spread their volume over multiple networks. o Deprive issuers of the ability to tailor unique product and fraud protection offerings most suitable to their business goals and their customers needs. Rather than issuers being able to design programs most suited to them these provisions commoditize payments in an effort solely to drive down merchant costs. Changes of the magnitude resulting from the Durbin Amendment, such as government mandated price-fixing and changes to the structure of the payments market, should not be imposed without serious thought, analysis and study. These Dodd-Frank provisions will have significant and long-term consequences to the financial system and the larger U.S.

6 economy, many of which cannot be determined today, and should not be implemented without careful study and analysis. Recommendation The Durbin Amendment was enacted through an extraordinary process: o Debit interchange had nothing to do with the financial crisis, and this provision had no place in the Dodd-Frank Act; o There was no consideration in any Congressional committee; o There was no vote in the House of Representatives; o There was only scant discussion in the Senate and that was by the lone sponsor of the amendment; o There was no analysis presented to Congress of the impact on consumers, the banking system, or the overall economy; and o There was no analysis of whether the $10 billion asset "safe harbor" would avoid harm to community banks and credit unions. We urge Congress to take the following steps to allow Members to give it due consideration and examine likely but unintended consequences, in the name of consumers and basic fairness: o First, delay the effective date for the Federal Reserve s rulemaking, including the interchange fee and network exclusivity restrictions, by two years. o Second, hold a series of hearings that include analysts, economists and regulators who can describe the likely effects of this provision. These hearings would also give retailers the opportunity to testify about how much of the savings from below-market interchange costs will be passed along to their customers. o Third, direct the Treasury Department or Government Accountability Office to review and analyze the product of these hearings, and present its analysis to Congress for review and debate. o Take appropriate additional action as suggested by the report.

Statement for the Record. On Behalf of the AMERICAN BANKERS ASSOCIATION. Before the. Antitrust Tax Force. Committee on the Judiciary

Statement for the Record. On Behalf of the AMERICAN BANKERS ASSOCIATION. Before the. Antitrust Tax Force. Committee on the Judiciary Statement for the Record On Behalf of the AMERICAN BANKERS ASSOCIATION Before the Antitrust Tax Force Committee on the Judiciary United States House of Representatives May 15, 2008 Statement for the Record

More information

Credit vs. Debit: The Network Perspective

Credit vs. Debit: The Network Perspective July 25, 2010 Credit vs. Debit: The Network Perspective Richard Santoro, Vice President, Government Affairs MasterCard Worldwide 1 Overview Origins of Payment Cards Four-Party Payment System Model Anatomy

More information

Comments of Travis B. Plunkett, Legislative Director

Comments of Travis B. Plunkett, Legislative Director Comments of Travis B. Plunkett, Legislative Director To The Federal Reserve Board of Governors On 12 CFR Part 235 Docket No. R 1404 Debit Card Interchange Fees and Routing; Proposed Rule February 22, 2011

More information

Good Morning. First, I would like to thank Chairwoman Capito, Ranking Member

Good Morning. First, I would like to thank Chairwoman Capito, Ranking Member Testimony of David Seltzer before the Financial Institutions and Consumer Credit Subcommittee of the Financial Institutions Committee of US House of Representatives. Thursday, February 17, 2011 Good Morning.

More information

Statement for the Record. American Bankers Association. Committee on Banking, Housing, and Urban Affairs. United States Senate

Statement for the Record. American Bankers Association. Committee on Banking, Housing, and Urban Affairs. United States Senate Statement for the Record On behalf of the American Bankers Association before the Committee on Banking, Housing, and Urban Affairs of the United States Senate Statement for the Record On behalf of the

More information

Docket No. R-14 04 and RIN No. 7100 A D63

Docket No. R-14 04 and RIN No. 7100 A D63 February 22, 2011 The Honorable Ben S. Bernanke Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, N.W. Washington, D.C. 205 5 1 Re: Docket No. R-14 04 and RIN

More information

THOUGHT LEADERSHIP THE GOLDEN AGE OF CARD PAYMENTS

THOUGHT LEADERSHIP THE GOLDEN AGE OF CARD PAYMENTS THOUGHT LEADERSHIP THE GOLDEN AGE OF CARD PAYMENTS 1 TABLE OF CONTENTS EXECUTIVE SUMMARY... 3 HISTORICALLY, COSTS HAVE STYMIED GROWTH OF CARD PAYMENTS... 3 GOLDEN AGE OF CARD PAYMENTS... 5 MORE VOLATILITY

More information

Payment Processing considerations to comply with IRS and PCI-DSS regulations and policies

Payment Processing considerations to comply with IRS and PCI-DSS regulations and policies itransact Presents Payment Processing considerations to comply with IRS and PCI-DSS regulations and policies Learning Objectives At the end of this course you will be able to: Prepare for IRS 6050w and

More information

Final text of Durbin Amendment as contained in the Dodd Frank Act

Final text of Durbin Amendment as contained in the Dodd Frank Act Final text of Durbin Amendment as contained in the Dodd Frank Act SEC. 920. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS. (a) REASONABLE INTERCHANGE TRANSACTION FEES FOR ELECTRONIC DEBIT TRANSACTIONS.

More information

MasterCard response to the Department of Finance public consultation Regulation (EU) 2015/751 on Interchange Fees for Card-based payment transactions

MasterCard response to the Department of Finance public consultation Regulation (EU) 2015/751 on Interchange Fees for Card-based payment transactions MasterCard response to the Department of Finance public consultation Regulation (EU) 2015/751 on Interchange Fees for Card-based payment transactions MasterCard MasterCard Worldwide (MasterCard) is a public-listed,

More information

Credit vs. Debit National Conference of State Legislators. Jean Ann Fox Director of Financial Services Consumer Federation of America

Credit vs. Debit National Conference of State Legislators. Jean Ann Fox Director of Financial Services Consumer Federation of America Credit vs. Debit National Conference of State Legislators Jean Ann Fox Director of Financial Services Consumer Federation of America Plastic Payments Debit Cards Pay Me Now Paid from funds in an account

More information

The Path to Compliance: Selecting Another PIN Debit Network

The Path to Compliance: Selecting Another PIN Debit Network The Path to Compliance: Selecting Another PIN Debit Network By: Kevin Barry General Manager, STAR Network 2011 First Data Corporation. All trademarks, service marks and trade names referenced in this material

More information

The Path to Compliance: Selecting Another PIN Debit Network

The Path to Compliance: Selecting Another PIN Debit Network The Path to Compliance: Selecting Another PIN Debit Network By: Kevin Barry General Manager, STAR Network 2011 First Data Corporation. All trademarks, service marks and trade names referenced in this material

More information

Impact of the Durbin Interchange. Industry: Who Gains? Who Loses?

Impact of the Durbin Interchange. Industry: Who Gains? Who Loses? Impact of the Durbin Interchange Amendment on the Card Payments Industry: Who Gains? Who Loses? August 11, 2010 * View s expressed are strictly the author s. Eric Grover 402 Oak Grove Avenue, Suite E Menlo

More information

Visa Europe Our response to the European Commission s proposed regulation of interchange fees for card-based payment transactions

Visa Europe Our response to the European Commission s proposed regulation of interchange fees for card-based payment transactions Visa Europe Our response to the European Commission s proposed regulation of interchange fees for card-based payment transactions Executive summary On 24 July 2013 the European Commission published a proposal

More information

July 31, 2015. Proposed Rule Making on Addition of Part 192 to Title 12 NYCRR Methods of Wage Payment, I.D. No. LAB-21-15-00009-P

July 31, 2015. Proposed Rule Making on Addition of Part 192 to Title 12 NYCRR Methods of Wage Payment, I.D. No. LAB-21-15-00009-P Via e-mail: regulations@labor.ny.gov Michael Paglialonga NYS Department of Labor, Building 12 State Office Campus, Room 509 Albany, New York 12240 Re: Proposed Rule Making on Addition of Part 192 to Title

More information

Visa Reloadable Frequently Asked Questions. EMV Travel Card

Visa Reloadable Frequently Asked Questions. EMV Travel Card Visa Reloadable Frequently Asked Questions EMV Travel Card How does the International Prepaid Card work? The International Prepaid Card is a reloadable prepaid Visa debit card, which means you can spend

More information

Interchange Optimization: Are you getting the best rate?

Interchange Optimization: Are you getting the best rate? 2012 Interchange Optimization: Are you getting the best rate? Northpark Town Center 1200 Abernathy Road, Suite 1700 Atlanta, Georgia 30328 (800) 846-1305 www.optimizedpmts.com There are many costs associated

More information

October 21, 2015. 2371 Rayburn House Office Building 2302 Rayburn House Office Building Washington, D.C. 20515 Washington, D.C.

October 21, 2015. 2371 Rayburn House Office Building 2302 Rayburn House Office Building Washington, D.C. 20515 Washington, D.C. October 21, 2015 Chairman Steve Chabot Ranking Member Nydia Velázquez House Committee on Small Business House Committee on Small Business 2371 Rayburn House Office Building 2302 Rayburn House Office Building

More information

AmaZing Cash FAQs. About the Program

AmaZing Cash FAQs. About the Program AmaZing Cash FAQs About the Program 1. How does the AmaZing Cash program work? The AmaZing Cash program comes automatically with the AmaZing Cash Credit Card and the AmaZing Cash Signature Card. You earn

More information

Financial Service Centers of America

Financial Service Centers of America Statement of Financial Service Centers of America Before the U. S. House of Representatives Committee on Ways and Means Subcommittee on Social Security Regarding Protecting Social Security Beneficiaries

More information

An Education in Merchant Processing

An Education in Merchant Processing An Education in Merchant Processing Presented by: Michael Mintz COO - AMG Payment Solutions Today s Agenda Introduction and Background Important Industry Terms The Electronic Payment Process Interchange

More information

Sen. Ann Duplessis Senior Vice President, Liberty Bank and Trust New Orleans, Louisiana and State Senator District 2 Louisiana State Senate

Sen. Ann Duplessis Senior Vice President, Liberty Bank and Trust New Orleans, Louisiana and State Senator District 2 Louisiana State Senate Testimony of Sen. Ann Duplessis Senior Vice President, Liberty Bank and Trust New Orleans, Louisiana and State Senator District 2 Louisiana State Senate On behalf of the Independent Community Bankers of

More information

2016 OUTLOOK: GLOBAL PAYMENTS

2016 OUTLOOK: GLOBAL PAYMENTS December 2015 2016 OUTLOOK: GLOBAL PAYMENTS Disruption across the industry a global theme Around the world, new entrants (including start-ups and nontraditional players) are entering the payments industry.

More information

Federal House of Representatives Economics, Finance & Public Administration Committee

Federal House of Representatives Economics, Finance & Public Administration Committee Federal House of Representatives Economics, Finance & Public Administration Committee Hearing on the Reserve Bank of Australia s reforms to the payment system May 2006 Table of contents Introduction 1.

More information

The Economics and Regulation of the Portuguese Retail Payment System

The Economics and Regulation of the Portuguese Retail Payment System The Economics and Regulation of the Portuguese Retail Payment System David S. Evans GlobalEcon, University College London, University of Chicago 4 December 2013 Lisbon Global Economics Group. Key Findings

More information

In Search of Credit Card Profitability: Finding and Retaining the Most Valuable Bank Card Customers

In Search of Credit Card Profitability: Finding and Retaining the Most Valuable Bank Card Customers In Search of Credit Card Profitability: Finding and Retaining the Most Valuable Bank Card Customers Analyst Author: Dennis Moroney Research Director, Bank Cards June 7, 2010 Reference # V63:16K TowerGroup

More information

Why Savings from Private Label ACH Debit Programs May Not Always Add Up.

Why Savings from Private Label ACH Debit Programs May Not Always Add Up. Commissioned by MasterCard. Why Savings from Private Label ACH Debit Programs May Not Always Add Up. A detailed cost comparison between ACH-based store loyalty programs and network debit cards. Edgar,

More information

Section XIV PREPAID CARDS AND ELECTRONIC FUNDS TRANSFER

Section XIV PREPAID CARDS AND ELECTRONIC FUNDS TRANSFER Section XIV PREPAID CARDS AND ELECTRONIC FUNDS TRANSFER Funds Disbursement by State Government One of the primary functions of many government agencies is disbursement of funds to its customers or clients.

More information

Review of Method of Payment Fees in Taxicabs

Review of Method of Payment Fees in Taxicabs STAFF REPORT ACTION REQUIRED Review of Method of Payment Fees in Taxicabs Date: June 14, 2011 To: From: Wards: Reference Number: Licensing and Standards Committee Jim Hart, Executive Director, Municipal

More information

The Merchant. Skimming is No Laughing Matter. A hand held skimming device. These devices can easily be purchased online.

The Merchant. Skimming is No Laughing Matter. A hand held skimming device. These devices can easily be purchased online. 1 February 2010 Volume 2, Issue 1 The Merchant Serving Florida State University s Payment Card Community Individual Highlights: Skimming Scam 1 Skimming at Work 2 Safe at Home 3 Read your Statement 4 Useful

More information

How to Use a Financial Institution

How to Use a Financial Institution How to Use a Financial Institution Latino Community Credit Union & Latino Community Development Center HOW TO USE A FINANCIAL INSTITUTION LATINO COMMUNITY CREDIT UNION & LATINO COMMUNITY DEVELOPMENT CENTER

More information

Statement for the Record

Statement for the Record Statement for the Record of the AMERICAN BANKERS ASSOCIATION Committee on Small Business U.S. House of Representatives For the hearing Electronic Payments Tax Reporting: Another Tax Burden for Small Businesses

More information

CONSULTATION PAPER Ministry of Law: LAW 06/011/016 MAS: P009-2006 August 2006. Unsecured Credit Rules

CONSULTATION PAPER Ministry of Law: LAW 06/011/016 MAS: P009-2006 August 2006. Unsecured Credit Rules CONSULTATION PAPER : LAW 06/011/016 MAS: P009-2006 August 2006 Unsecured Credit Rules TABLE OF CONTENTS 1. Introduction 4 2. Proposed amendments to unsecured credit rules for financial institutions 2.1

More information

European Payment Card Systems for the 21 st Century. A paper from MasterCard Europe

European Payment Card Systems for the 21 st Century. A paper from MasterCard Europe U European Payment Card Systems for the 21 st Century A paper from MasterCard Europe For four decades, MasterCard Europe 1 has been working successfully with European banks to deliver secure, efficient

More information

William C. Rosacker President, United Bankers Bank. On behalf of the Independent Community Bankers of America. Before the

William C. Rosacker President, United Bankers Bank. On behalf of the Independent Community Bankers of America. Before the Testimony of William C. Rosacker President, United Bankers Bank On behalf of the Independent Community Bankers of America Before the Congress of the United States House of Representatives Committee on

More information

DECISION ON DETERMINING THE INTERCHANGE FEE IN VISA AND MASTERCARD SYSTEMS

DECISION ON DETERMINING THE INTERCHANGE FEE IN VISA AND MASTERCARD SYSTEMS DECISION ON DETERMINING THE INTERCHANGE FEE IN VISA AND MASTERCARD SYSTEMS The proceedings initiated upon a complaint of the Polish Organisation of Commerce and Distribution, were conducted under Polish

More information

Payments Package: Questions and Answers

Payments Package: Questions and Answers Payments Package: Questions and Answers Date: November 2013 Contact: Ruth Milligan, T: +32 2 737 05 95, milligan@eurocommerce.be A. Introduction The Commission published its Payments Package on 24 July

More information

WELCOME Follow this easy checklist to start your account off right!

WELCOME Follow this easy checklist to start your account off right! WELCOME Follow this easy checklist to start your account off right! Enroll in online banking services Enroll in Online Banking at (click on Enroll on the top red bar and enter your information) - Required

More information

New multi-lateral EFTPOS interchange fee model issues

New multi-lateral EFTPOS interchange fee model issues New multi-lateral EFTPOS interchange fee model issues Background to the increased EFTPOS Fees The big banks, along with Coles and Woolworths as members of EFTPOS Payments Australia Limited (EPAL) have

More information

HOUSE BILL 2587 AN ACT

HOUSE BILL 2587 AN ACT Senate Engrossed House Bill State of Arizona House of Representatives Fifty-second Legislature First Regular Session 2015 HOUSE BILL 2587 AN ACT AMENDING SECTIONS 35-142 AND 35-315, ARIZONA REVISED STATUTES;

More information

Cardholder Frequently Asked Questions

Cardholder Frequently Asked Questions Skip to Content Cardholder Frequently Asked Questions Close this browser window to return to session. TOTALPAY Card by ADP FAQs CARD BASICS 1. Is my TOTALPAY Card ready to use when I receive it? 2. When

More information

Target Data Breach Survey of Illinois Banks. Executive Summary

Target Data Breach Survey of Illinois Banks. Executive Summary Target Data Breach Survey of Illinois Banks Executive Summary February 2014 www.ilbanker.com Target Data Breach Survey of Illinois Banks Executive Summary In December of 2013, just days before the holidays,

More information

Banking Fees in Australia

Banking Fees in Australia Banking Fees in Australia Kelsey Wilkins* The Reserve Bank has conducted a survey on bank fees each year since 1997. The results of the most recent survey suggest that banks fee income from both households

More information

July 31, 2015. Re: Notice of Proposed Rulemaking: Methods of Payment of Wages LAB-21-15-00009-P

July 31, 2015. Re: Notice of Proposed Rulemaking: Methods of Payment of Wages LAB-21-15-00009-P Mr. Michael Paglialonga NYS Department of Labor, Building 12 State Office Campus, Room 509 Albany, New York 12240 Re: Notice of Proposed Rulemaking: Methods of Payment of Wages LAB-21-15-00009-P Dear Mr.

More information

Key Points. Ref.:EBF_004742 Brussels, 04 November 2013

Key Points. Ref.:EBF_004742 Brussels, 04 November 2013 Ref.:EBF_004742 Brussels, 04 November 2013 European Banking Federation Position Paper on the European Commission Proposal for a Regulation on Interchange Fees for Card-Based Payment Transactions Launched

More information

How does the EMV Travel Prepaid Card work?

How does the EMV Travel Prepaid Card work? How does the EMV Travel Prepaid Card work? The EMV Travel Prepaid Card is a reloadable prepaid Visa Reloadable EMV Travel Prepaid Card, which means you can spend up to the value placed on the card anywhere

More information

The Role of Interchange Fees on Debit and Credit Card Transactions in the Payments System

The Role of Interchange Fees on Debit and Credit Card Transactions in the Payments System Economic Brief May 2011, EB11-05 The Role of Interchange Fees on Debit and Credit Card Transactions in the Payments System By Tim Mead, Renee Courtois Haltom, and Margaretta Blackwell When consumers use

More information

WELCOME Follow this easy checklist to start your account off right!

WELCOME Follow this easy checklist to start your account off right! WELCOME Follow this easy checklist to start your account off right! Enroll in online banking services Enroll in Online Banking at (click on Enroll on the top red bar and enter your information) - Required

More information

A Guide to Prepaid Cards

A Guide to Prepaid Cards A Guide to Prepaid Cards 1 A Guide to Prepaid Cards As online sales increase year on year and contactless technology makes physical purchases quicker and easier, the way UK consumers transact has changed.

More information

CASH MANAGEMENT 210 Banking in the 21 st Century. 2014 CPIM Academy

CASH MANAGEMENT 210 Banking in the 21 st Century. 2014 CPIM Academy CASH MANAGEMENT 210 Banking in the 21 st Century 2014 CPIM Academy The Banking Environment Current & Future Trends Provide a high-level overview of current banking marketplace Reveal projected trends in

More information

Qantas welcomes the opportunity to comment on the Financial System Inquiry Final Report (the Report) released on Sunday, 7 December 2014.

Qantas welcomes the opportunity to comment on the Financial System Inquiry Final Report (the Report) released on Sunday, 7 December 2014. 2 April 2015 Mr David Crawford Senior Adviser, Financial System and Services Division The Treasury Langton Crescent Parkes ACT 2600 Dear Mr Crawford, Financial System Inquiry Final Report Qantas welcomes

More information

See submissions from Australian Taxpayers Alliance and the International Alliance for Electronic Payments, Christopher Zinn, MasterCard and Visa.

See submissions from Australian Taxpayers Alliance and the International Alliance for Electronic Payments, Christopher Zinn, MasterCard and Visa. 21 September 2015 Senate Standing Committee on Economics By email: economics.sen@aph.gov.au Dear Dr Dermody, RE: Inquiry into matters relating to credit card interest rates A number of submissions to the

More information

Creating a Card-Based B2B Payments Program

Creating a Card-Based B2B Payments Program A report prepared by Global Corporate Payments is published by American Express. Additional information can be found at: http://business.americanexpress.com/us/payment-services is report was prepared by

More information

INSTANT FINANCIAL CARD ISSUANCE

INSTANT FINANCIAL CARD ISSUANCE INSTANT FINANCIAL CARD ISSUANCE Optimizing card programs to appeal to today s consumers By Ron Zanotti Senior Vice President Instant Issuance Solutions Datacard Group ABSTRACT The U.S. financial crisis

More information

What happened to the FDIC? Robert Barnett July, 2010

What happened to the FDIC? Robert Barnett July, 2010 What happened to the FDIC? Robert Barnett July, 2010 Some unusual changes have taken place in deposit insurance over the past few years, and the recent use of an increase in an arcane part of the deposit

More information

BEST-IN-CLASS MERCHANT SERVICES

BEST-IN-CLASS MERCHANT SERVICES BEST-IN-CLASS MERCHANT SERVICES First Data takes you beyond with merchant processing solutions that grow revenue and strengthen your customer relationships. HOW WILL YOU GO BEYOND? In an era when the banking

More information

SUMMARY: The Board is publishing a final rule, Regulation II, Debit Card Interchange Fees

SUMMARY: The Board is publishing a final rule, Regulation II, Debit Card Interchange Fees FEDERAL RESERVE SYSTEM 12 CFR Part 235 Regulation II; Docket No. R-1404 Debit Card Interchange Fees and Routing AGENCY: Board of Governors of the Federal Reserve System ACTION: Final rule SUMMARY: The

More information

Credit Card Agreement and Disclosure Statement

Credit Card Agreement and Disclosure Statement Credit Card Agreement and Disclosure Statement Your Lifetime Financial Partner In this Agreement the words you and your mean each and all of those signing, using or having a credit Card account with Northwest

More information

The JOBS Act: Implications for Broker-Dealers

The JOBS Act: Implications for Broker-Dealers CLIENT MEMORANDUM March 28, 2012 The JOBS Act: Implications for Broker-Dealers On March 27, 2012, the House of Representatives passed the Jumpstart Our Business Startups Act (the JOBS Act ), in the same

More information

the debit card interchange transaction fee limits described in paragraph (1); and

the debit card interchange transaction fee limits described in paragraph (1); and Date: June 22, 2011 TO: Board of Governors SUBJECT: Final rule on debit card interchange fees and routing and FROM: Staff 1 interim final rule on fraud prevention adjustment A C T I O N R E Q U EST E D

More information

May 18, Rayburn House Office Building 2221 Rayburn House Office Building Washington, DC Washington, DC 20515

May 18, Rayburn House Office Building 2221 Rayburn House Office Building Washington, DC Washington, DC 20515 May 18, 2016 Chairman Jeb Hensarling Ranking Member Maxine Waters House Financial Services Committee House Financial Services Committee 2228 Rayburn House Office Building 2221 Rayburn House Office Building

More information

National Small Business Network

National Small Business Network National Small Business Network WRITTEN STATEMENT FOR THE RECORD US SENATE COMMITTEE ON FINANCE U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON WAYS AND MEANS JOINT HEARING ON TAX REFORM AND THE TAX TREATMENT

More information

FBFCU VISA PREPAID DEBIT CARD FREQUENTLY ASKED QUESTIONS (FAQs)

FBFCU VISA PREPAID DEBIT CARD FREQUENTLY ASKED QUESTIONS (FAQs) ABOUT THE FORT BRAGG FEDERAL CREDIT UNION VISA PREPAID CARD What is the FORT BRAGG FEDERAL CREDIT UNION Visa Prepaid Card? Is the FORT BRAGG FEDERAL CREDIT UNION Card like a checking or savings account?

More information

Box 1: Four party credit card schemes

Box 1: Four party credit card schemes The relevant sections of the Payment Systems (Regulation) Act 1998 are provided in Attachment 1. The Reserve Bank did not designate the three party card schemes, the American Express card system and the

More information

A Guide to the Card Payments System Reforms

A Guide to the Card Payments System Reforms A Guide to the Card Payments System Reforms Michele Bullock* Studies by the Reserve Bank undertaken from 2000 to 2002 concluded that the structure of pricing in the Australian card payments system was

More information

Bank Easy Card. Benefits. Adding Funds

Bank Easy Card. Benefits. Adding Funds Bank Easy Card Enjoy the unrivaled purchasing power of MasterCard with a prepaid, reloadable CharterBank Bank Easy Card. It's the smart way to manage and protect your money. Apply in minutes no minimum

More information

PAYROLL CARD FREQUENTLY ASKED QUESTIONS

PAYROLL CARD FREQUENTLY ASKED QUESTIONS The following document provides answers to frequently asked questions regarding the Umpqua Bank Payroll Card. Contact Customer Care at 800-650-7141 with questions. Card Basics Q. How does the Payroll Card

More information

Why do you need my Social Security Number and other personal information when I enroll for an I.C.E. card?

Why do you need my Social Security Number and other personal information when I enroll for an I.C.E. card? ABOUT THE ICE MasterCard Prepaid CARD What is the I.C.E MasterCard Prepaid CARD? Is the I.C.E. Card like a checking or savings account? Are funds loaded on to the I.C.E. Card FDIC insured? Are there age

More information

Western Union. Khalid Fellahi, SVP & GM WU Digital. March 25, 2014

Western Union. Khalid Fellahi, SVP & GM WU Digital. March 25, 2014 Western Union Khalid Fellahi, SVP & GM WU Digital March 25, 2014 SAFE HARBOR This presentation contains certain statements that are forward-looking within the meaning of the Private Securities Litigation

More information

Date: June 22, Division of Reserve Bank Operations and Payment Systems (Louise Roseman,

Date: June 22, Division of Reserve Bank Operations and Payment Systems (Louise Roseman, Date: June 22, 2011 TO: Board of Governors SUBJECT: Final rule on debit card interchange fees and routing and FROM: Staff 1 interim final rule on fraud prevention adjustment ACTION REQUESTED Staff requests

More information

Payment card rewards programs have become increasingly popular

Payment card rewards programs have become increasingly popular Do U.S. Consumers Really Benefit from Payment Card Rewards? By Fumiko Hayashi Payment card rewards programs have become increasingly popular in the United States. Nearly all large credit card issuers offer

More information

Credit Cards and Consumer Debt

Credit Cards and Consumer Debt 214 Massachusetts Ave. N.E, Washington D.C. 20002 (202) 546-4400 www.heritage.org CONGRESSIONAL TESTIMONY Credit Cards and Consumer Debt Testimony before Subcommittee on Commercial and Administrative Law

More information

The Definitive Guide to Credit Card Surcharging

The Definitive Guide to Credit Card Surcharging The Definitive Guide to Credit Card Surcharging (for Merchants) Merchant surcharging made easy. American merchants pay the highest merchant fees in the world, fees that are many times higher than the fees

More information

Target Breach Impact Survey

Target Breach Impact Survey Target Breach Impact Survey July 2014 Prepared by Benchmarking & Survey Research. Table of Contents Page Survey Methodology 3 Profile of Survey Participants 4 Impact of Target Breach 5 16 Reimbursement

More information

Public authorities have recently intervened in the U.S. payment

Public authorities have recently intervened in the U.S. payment The New Debit Card Regulations: Effects on Merchants, Consumers, and Payments System Efficiency By Fumiko Hayashi Public authorities have recently intervened in the U.S. payment card industry to address

More information

F I C O. February 22, 2011

F I C O. February 22, 2011 F I C O Fair Isaac Corporation 901 Marquette Avenue, Suite 3200 Minneapolis, M N 5 5 4 0 2 U S A T 6 1 2-7 5 8-5 2 0 0 F 6 1 2-7 5 8-5 2 0 1 www.fico.com February 22, 2011 Jennifer J. Johnson, Secretary

More information

on the date of October 20, 2009

on the date of October 20, 2009 Testimony of Amanda Austin before the Senate Committee on Small Business and Entrepreneurship on the date of October 20, 2009 on the subject of Reform Done Right: Sensible Health Care Solutions for America

More information

Joseph Coleman, Chairman Financial Service Centers of America. Hearing on Direct Deposit of Social Security benefits. September 12, 2012.

Joseph Coleman, Chairman Financial Service Centers of America. Hearing on Direct Deposit of Social Security benefits. September 12, 2012. Statement of Joseph Coleman, Chairman Financial Service Centers of America Submitted to the House Committee on Ways and Means Subcommittee on Social Security Hearing on Direct Deposit of Social Security

More information

Cost-management strategies. Your guide to accepting card payments cost-effectively

Cost-management strategies. Your guide to accepting card payments cost-effectively Cost-management strategies Your guide to accepting card payments cost-effectively Table of Contents Guidance from Wells Fargo Merchant Services...3 The secret to better interchange rates...4 Why interchange

More information

Volume 23 January 2011 www.speerandassociates.com

Volume 23 January 2011 www.speerandassociates.com Strategic Commentary 30YEARS Vision, Experience, Partnership 1980 2010 Volume 23 January 2011 www.speerandassociates.com Durbin Debit Dilemma: A Special Report Speer & Associates, Inc. 1165 Sanctuary Parkway,

More information

smile current account Terms and Conditions

smile current account Terms and Conditions smile current account Terms and Conditions Terms and Conditions of the smile current account, overdraft and debit card (incorporating smilemore and smile student) With effect from 5 July 2015 Terms and

More information

An overview from. Report 3 in the Payday Lending in America series Payday Lending in America: Policy Solutions. Oct 2013

An overview from. Report 3 in the Payday Lending in America series Payday Lending in America: Policy Solutions. Oct 2013 An overview from Report 3 in the Payday Lending in America series Payday Lending in America: Policy Solutions Oct 2013 Overview About 20 years ago, a new retail financial product, the payday loan, began

More information

Facing Durbin: Enhancing DDA Value with Check Based Solutions

Facing Durbin: Enhancing DDA Value with Check Based Solutions Facing Durbin: Enhancing DDA Value with Check Based Solutions Conducted by Javelin Strategy & Research September 2011 2011 Javelin Strategy & Research All Rights Reserved I. Overview The economics surrounding

More information

David Jones Storecard and David Jones American Express Card Member Agreement, Financial Services Guide and Purchase Protection. Terms and Conditions

David Jones Storecard and David Jones American Express Card Member Agreement, Financial Services Guide and Purchase Protection. Terms and Conditions David Jones Storecard and David Jones American Express Card Member Agreement, Financial Services Guide and Purchase Protection Terms and Conditions Issued May 2016 DAVID JONES STORECARD AND DAVID JONES

More information

Prepaid Cards. An alternative to credit and debit cards. When choosing how to pay for their purchases, consumers have many options.

Prepaid Cards. An alternative to credit and debit cards. When choosing how to pay for their purchases, consumers have many options. General-purpose reloadable prepaid cards Prepaid Cards An alternative to credit and debit cards When choosing how to pay for their purchases, consumers have many options. Cash, check, debit and credit

More information

Bank Products. 3.1 Introduction

Bank Products. 3.1 Introduction Bank Products Bank Products For many people, the first financial institution they deal with, and the one they use most often, is a bank or credit union. That s because banks and credit unions provide a

More information

Reasons for Congress to Keep the LIFO Inventory Method

Reasons for Congress to Keep the LIFO Inventory Method Reasons for Congress to Keep the LIFO Inventory Method The last-in, first-out (LIFO) inventory method has been an important provision of the U.S. tax code for the past 70 years however the Obama administration

More information

Annual Analysis Card Payments

Annual Analysis Card Payments Annual Analysis Card Payments Cards and Transactions February 2014 With an expected GDP growth of 0.5% and an almost 1% decline in consumption, analysts define 2013 as a year of feeble economic recovery

More information

MasterCard Payroll CardTM

MasterCard Payroll CardTM MasterCard Payroll CardTM Pay employees more efficiently Solutions MasterCard Workplace Solutions MasterCard Workplace Solutions MasterCard Workplace Solutions introducing the MasterCard Payroll Card A

More information

Visa Student Card Terms and Conditions. These are your Student Card Terms and Conditions.

Visa Student Card Terms and Conditions. These are your Student Card Terms and Conditions. Visa Student Card Terms and Conditions These are your Student Card Terms and Conditions. "Agreement" means these Visa Student Card Terms and Conditions. "We" "us" and "our" refer to Bank-Fund Staff Federal

More information

Travel Card. Cardholder Frequently Asked Questions. June 2014 T.FQ.S.20141.E

Travel Card. Cardholder Frequently Asked Questions. June 2014 T.FQ.S.20141.E Travel Card Cardholder Frequently Asked Questions Travel Card (1) Where can I use my card? Your card may be used anywhere debit cards are accepted. The brand marks on your card indicate where the card

More information

ON: Examining Legislative Proposals to Modernize Business Development Companies and Expand Investment Opportunities

ON: Examining Legislative Proposals to Modernize Business Development Companies and Expand Investment Opportunities ON: Examining Legislative Proposals to Modernize Business Development Companies and Expand Investment Opportunities TO: House Committee on Financial Services, Subcommittee on Capital Markets and Government

More information

Financial Management

Financial Management I. Banking landscape today In the past year alone, banks have taken many actions to make up for lost profits, including eliminating free checking, raising fees, and pushing customers to buy more financial

More information

TOWARDS FAIRER PAYMENTS FEES

TOWARDS FAIRER PAYMENTS FEES 1. TOWARDS FAIRER PAYMENTS FEES November 2015 Towards fairer payments fees New Zealand is increasingly a nation where payments for everything, from groceries to airline tickets, to restaurant and doctor's

More information

The New Debit Card Regulations:

The New Debit Card Regulations: The New Debit Card Regulations: Initial Effects on Networks and Banks By Fumiko Hayashi A merican consumers are using debit cards more than ever before, affecting how banks and merchants do business and

More information

TOP TRUMPS Comparisons of how to pay for goods and services online

TOP TRUMPS Comparisons of how to pay for goods and services online Cash Cash is legal tender in the form of bank notes and coins Small value purchases e.g. cafes, shops Pocket money Repaying friends Cash is physically transferred from one person to the next, usually face-to-face

More information

Open Banking Building a transparent banking system

Open Banking Building a transparent banking system Open Banking Building a transparent banking system Housing Open Banking : Building a transparent banking system Labour s With Britain back in recession thanks to the Government s failed economic policies

More information

TESTIMONY OF TODD MCCRACKEN, PRESIDENT NATIONAL SMALL BUSINESS ASSOCIATION

TESTIMONY OF TODD MCCRACKEN, PRESIDENT NATIONAL SMALL BUSINESS ASSOCIATION TESTIMONY OF TODD MCCRACKEN, PRESIDENT NATIONAL SMALL BUSINESS ASSOCIATION H.R. 2382, Credit Card Interchange Fees Act of 2009 and H.R. 3639, Expedited CARD Reform for Consumers Act of 2009 Before the

More information