New Report Predicts Impact of the Durbin Amendment

A new report from Aite Group (AG) predicts 17 ways in which the Durbin amendment will reshape the US payments industry in the coming years. The report provides an overview of the amendment’s rules and an assessment of which market players will lose out and which will win as a result of the new order.

The interchange battle between merchants and issuers is coming to a close now that the Durbin Amendment has been interpreted by the Federal Reserve Bank (FRB); the payments industry must scramble to comply. The merchant community has largely prevailed, but not to the extent that it had hoped. While the interchange-rate cap was set at a higher level than was originally anticipated, merchants have become the major force in the routing of debit-based transactions.

Large banks, issuers, and networks have been stripped of their ability to set debit card interchange fees as they please. Debit and prepaid card issuers are grieving over significant losses in revenue and the added expense of making it all work.

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