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Issue link: https://read.dmtmag.com/i/47064
TOP OF THE NEWS Merchants condemn effort to repeal swipe-fee reforms New legislation introduced T he Merchants Payments Coalition on Oct. 12 condemned a plan by Reps. Jason Chaffetz (R-Utah) and Bill Owens (D-N.Y.) to introduce legislation to repeal swipe fee reforms. The reforms are just beginning to benefit merchants, consumers and small banks across the country, the Coalition said in a statement. "For Members of Congress today to do the bidding of the country's biggest banks and attempt to repeal these reforms is an affront to merchants and their customers," said Mallory Duncan, chairman of the Merchants Payments Coalition (MPC) and senior vice president and general counsel of the National Retail Federation. "Repealing these reforms sends a message that anti-competitive, price-fixing behavior on the part of the country's biggest banks is acceptable." As a result of the reforms and the small bank exemption, small banks and credit unions are utilizing the exemption and the two-tier interchange system to their advantage. Some are even paying consumers to open checking accounts n Heartland Payment Systems® releases first actual Durbin impact statistics After the implementation of the Durbin Amendment swipe fee reform on October 1, Heartland Payment Systems (Princeton, N.J.), one of the nation's largest payments processors, has released the first real-world data about the legislation's actual effects on busi- ness owners across the United States. From the first to the third of October, Heartland passed along $1,779,568 in debit interchange reductions to its merchants across the U.S. Restaurant merchants received $671,652 of this reduction. The company estimates its average merchant will save more than $1,000 in the first year alone. "These savings are just the tip of the iceberg," said Bob Baldwin, presi- dent at Heartland. "Durbin Dollars should stay where they belong—in merchants' bank accounts—and Heartland is helping business owners keep more of their hard-earned cash. Merchants shouldn't take this for granted. They need to be vigilant in ensuring they receive the cost savings they deserve so they don't unknow- www.npnweb.com n NPN Magazine and use debit cards. According to the National Association of Federal Credit Unions, traffic to its credit union locator site has increased more than 200 percent in the past week as customers have started looking for small banks that are effectively utilizing the new two-tier system. This is benefit- ing small banks and their customers. "Earlier these lawmakers claimed they were trying to protect the interests of small banks and credit unions," said Lyle Beckwith, senior vice president of government relations at the National Association of Convenience Stores. "Now that numerous stories prove that customers are fleeing high fee banks in favor of smaller institutions, it is clear that Congressmen Chaffetz and Owens are merely shilling for their too-big-to-fail friends." Swipe fee reform went into effect on October 1. Though the Federal Reserve found that the average cost of a transac- tion was four cents, its final rule allowed the country's larg- est banks to collect 24 cents for each debit transaction. ingly fall victim to processors looking to profit at their expense." The real effects of the Durbin Amendment have already started to take hold as evidenced in the statistical findings below derived from data col- lected between October 1-3, 2011 across Heartland's portfolio of 250,000 mer- chant locations. Heartland has found: 65 percent of its signature debit sales volume qualified as regulated On average, there is a savings of $0.21 per transaction for regulated (vs. non-regulated) The average signature debit non- regulated interchange fee per trans- action is $0.44 The average signature debit regu- lated interchange fee per transaction is $0.23 On average, there is a savings of 75 basis points for regulated (vs. non- regulated) The average signature debit non-reg- ulated effective rate is 1.55 percent The average signature debit regu- lated effective rate is 0.80 percent While the majority of merchants are • • • • • • • realizing significant savings from the debit rate reductions, merchants that process a high volume of small-ticket transactions are actually paying more due to the elimi- nation of MasterCard and Visa's small- ticket interchange rates. As of October, the card brands are charging the same regulated rates as standard transactions of 21 cents plus one cent plus 0.05 per- cent of the transaction volume, which translates to increased costs on debit transactions less than $11. In Heartland's portfolio, quick serve restaurants (QSRs), for example, are now paying an average effective interchange rate of 2.15 percent compared to the 2.08 percent they were charged under the small-ticket provision. n LoyaltyOne: 74 percent of U.S. and Canadian consumers don't see benefit of Exchanging Personal Information, LoyaltyOne Research Shows Seventy-four percent of American and Canadian consumers said they don't feel they're receiving a benefit from sharing personal information with marketers, according to the latest survey research from LoyaltyOne (Toronto). Just 52 percent said they somewhat or strongly agree with the statement OCTOBER 2011 7