PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Durbin Amendment: Addressing the “D” Word

By Chris McWilton
February 17, 2011
in Industry Opinions
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
durbin amendment

Included in the Dodd-Frank Act last year, the flawed Durbin Amendment represents government-instituted price fixing of debit interchange – the fees that merchants incur for the convenience and protection of accepting debit cards.

Currently proposed regulations cap these fees at a fraction of their previous level. If enacted, the result is more than $14 billion tax on consumers each year, upsetting the previously well-balanced, self-regulated payments system and drastically reducing revenue for the issuing community.

With this lost revenue, banks will need to balance their books and will be forced to consider increased fees for consumers or reduced access to banking benefits and services. At the same time, the Durbin Amendment does not require merchants to pass their newfound savings onto consumers.

Look no further than recent media stories for proof on how “Durbin Fees” might play out for bank customers.

This Amendment was passed in an unprecedented process without any Congressional review or vote in the House. Since then, these price controls have been publicly condemned by both Democrats and Republicans for delivering little to benefit consumers – and in fact may actually result in significant harm. Changes of this magnitude should not be imposed without serious thought, analysis and study of the long-term consequences to the financial system and the larger US economy.

The Durbin Amendment will no doubt have an unintended, negative impact on the millions of Americans who rely on them as a core payment tool for their daily financial management needs. Take the example of a working family who uses their credit union debit card to purchase groceries, buy gas and pay bills. Once banks are forced into raising fees, this family will be required to pay for their checking account and other services that were previously free. If the family can’t afford these increased costs, they’ll l be pushed out of the banking system.

Consumers have demonstrated a resounding affinity for debit cards as a critical component of their personal financial management. Does government really want to take this choice out of Americans’ hands?

Tomorrow’s Congressional hearing is one step. It’s important that voters express their concern and let their congressional representatives know that these unintended consequences cannot be tolerated.

Chris A. McWilton is president of U. S. Markets for MasterCard Worldwide. In this capacity, Mr. McWilton oversees all of the company’s U. S. activities including sales, business development, business strategy, and relationship management for card issuers, merchants and merchant acquirers.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: DebitMobile Payments

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    digital cards

    Beyond Plastic: Why Digital Cards Are the Future of Credit

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025
    Rewire Acquires Imagen, Looking at Prepaid Cards for Migrant Workers

    Smells Like Team Spirit: What Makes Cobranded Credit Cards Work

    July 3, 2025
    uk banking outages

    New Continuous Strategies for Battling Account Takeovers

    July 2, 2025
    Fraud Monitoring

    What to Expect When Nacha’s Fraud Monitoring Rules Take Effect

    July 1, 2025
    payments

    Don’t Just React to What’s Next in Payments—Anticipate It

    June 30, 2025
    consumer debit

    As Payment Types Proliferate, Debit Cards Still Go Strong

    June 26, 2025
    Embedded Payments

    How Embedded Payments Is Optimizing the Expense Management Process

    June 25, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result