Durbin Amendment

What is cash discount?

The last-minute amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act submitted by Senator Richard Durbin assigned the Federal Reserve the role of placing a reasonable and proportional limit on debit card interchange fees and opened up the interchange networks for competition. Among other stipulations, the Durbin Amendment and the decisions of the Federal Reserve mandated the following key changes:

  • Established a fee ceiling – a $0.21 fee on all debit card transactions, down significantly from the previous fee – plus a 1 cent fraud charge and .05 percent fee for fraud losses. This only applies to cards issued from banks with more than $10 billion in assets (an estimated 85% of all transactions).
  • Allows merchants to impose a $10 minimum on credit card transactions and offer a discount to customers who pay with debit or cash.

What is cash discount?

There is an opportunity for many merchants to reduce cost on debit card transactions depending on their current pricing structure.

Will the changes benefit you? Let an Envoy sales representative review your statement and make sure you are getting the savings you deserve!