A telemarketer called from “Express Processing Payments”, with the pitch, “Have you heard about new regulated rates that Visa and Mastercard introduced for small businesses only?” And further, “…reduce your rates 20-50%.” Let’s dispel this claim right now. There’s no such thing.

The only ‘recent’ government regulation regarding rates, are those from the Durbin Amendment, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In August 2011, I reported on the proliferation of robo calls that followed the federal legislation for debit card transactions:

Under the final rule, the maximum permissible interchange fee that an issuer may receive for an electronic debit transaction will be the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. This provision regarding debit card interchange fees is effective on October 1, 2011.

What does this mean to merchants?

1. The maximum the issuer (if they meet regulated size) can receive is .05% plus $.21 plus $.01 if qualified.
2. What merchants pay are determined by the salesperson selling them.
3. Visa debit interchange rate for CPS Retail was 0.80% + $0.25 per transaction prior to the new legislation. If a small business received a 50% reduction in debit fees, the average small business processor still increases their profits significantly.