Citing a string of unintended consequences, PayFusion’s CEO took pen to paper and outlines what he sees as one of the more important, and far reaching, impacts of the Durbin Amendment (and it’s not interchange regulation). As issuer control over network routing is diluted, networks will have to maintain an uncomfortable balance between merchant and issuer demands. In essence, the predictable process that drove capacity planning and long term business models is now stepping through a field of land mines.
“Riha believes the new rules make it more difficult for networks to manage their businesses. Pre-Durbin, networks could project infrastructure and capacity needs based on how many issuers were under contract, the number of cards in the network and projections of transaction volumes. Now the networks will also need to determine how many transactions will go down alternate, less preferred routes.”
