Effective October 1, 2011, Visa introduced new interchange rates to ensure compliance with the final U.S. Federal Reserve Bank rules for the debit regulation provisions of the Dodd-Frank Act. The interchange rate assessed to regulated card products including debit, prepaid, commercial prepaid, and business debit cards is 0.05% + $0.21 + $0.01 fraud adjustment. The $0.01 fraud adjustment component of the interchange rate charged was approved as part of an interim rule that allows card issuers to receive additional interchange, on a per transaction basis, if the issuer certifies adoption of specific fraud prevention policies and procedures.
Visa has confirmed that most regulated card issuers have certified their adoption of the fraud prevention policies. For the card issuers who have not certified, Visa will utilize a manual adjustment process to debit card issuers of the fraud adjustment amounts paid, to ensure compliance with the Act. Visa will utilize the following manual process to facilitate adjustments:
- Visa will manually submit debits to non-certified issuers and will pass the appropriate credits to affected acquirers.
- The first round of adjustments will begin January 12, 2012 for transactions occurring between the timeframe of October 1, 2011 through December 31, 2011 (adjustments will be made at the BIN level).
- The manual adjustment process will continue quarterly, with the next adjustment occurring in April 2012 for transactions processed from January 2012 through March 2012.
- The process will remain in effect until the U.S. Federal Reserve Bank communicates the final fraud prevention standards and timeline.