Many businesses that process credit card payments will notice big changes in swipe fees, and other onerous fees in the coming months, thanks to legislation enacted by the government to reverse some dubious practices by banks who rely heavily on the questionably fees as sources of high profit margins. The Durbin Amendment emerged as a last-minute addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and since then has sparked tremendous debate.
The amendment just took legal effect on October 1st, but already we’re seeing several of its ramifications. Banks, that stand to lose profits due to the fee caps imposed by Durbin, have priced those changes right into their checking account services. For the consumer, this means less free or rewards checking, if any at all. At the same time, retailers who promised to lower prices if these fees were reduced, since lower fees means they profit more on products they sell because of not paying those fees for credit and debit swipes, have not made good on their pledge to pass savings on to consumers, except for puveyors of adt security and some other valued services. Check out this infographic for a breakdown of the impact of this amendment:
