Good News for Merchants Who Process Debit Cards

In response to the ever increasing fees that merchants are charged to process debit cards, the Dodd-Frank Reform Act of 2010 required the Federal Reserve Board to determine a reasonable interchange fee to process debit card transactions in order to put a cap on the fees. The Board of Governors of the Federal Reserve determined that 0.05% + $0.21 per transaction is reasonable. As of October 1, 2011 fees for processing debit cards are capped at that level.

Merchants can save if they are on an interchange plus pricing model where the interchange fees are passed through at their exact cost, including the new 0.05% + $.21 fee. Talk to your credit card processor to determine if your account is set up to provide you with the most savings.

Contributor: Michigan Chamber of Commerce