Visa interchange rate October 2014 release

The Visa Fall 2014 interchange reimbursement rate release is now available for PDF download. At a glance, I didn’t spot any changes to rates, following broad changes and increases for business to business since April 2013.

The transaction and volume minimum did increase for the Credit Threshold, but the maximum chargeback ratio remains the same at 0.020%.

credit threshold visa

New higher minimums for credit performance threshold.

For merchants, no news is good news! If your company is business to business, managing interchange is critically important. The Business Electronic Interchange Reimbursement (EIRF) Fee increased from 2.75% to 2.95% in the last year. Merchants can avoid EIRF and Standard with improved interchange qualification management.

Click here for handy web page with links for to all credit card brand rates. As of October 21, 2014, MasterCard has not released an update for Fall, however, the spring update is labeled 2014 – 2015, so perhaps there will not be one.

Bernanke delays debit interchange standards deadline

Due to the large response for public comment on debit interchange provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act  Federal Reserve proposes debit card interchange fee standards, Bernanke announces a delay in issuing standards, due April 21. He also states they are committed to completing rulemaking for the July 21 mandated implementation date.

March 29, 2011 Bernanke letter to Senate Banking Committee (pdf).

The Credit Union National Association responded with their own press release:

Credit unions urge Bernanke to support delay in debit interchange law

March 30, 2011

Contact: Patrick Keefe
CUNA Communications, 202-508-6765

Credit unions have urged Fed Chairman Ben Bernanke to support a congressionally mandated delay in the implementation of the debit interchange law, due to take effect July 21, to allow for “much-needed time” to consider many concerns raised about the new law, and to give the Fed time to “develop rules that will ensure the outcome Congress intended for consumers and issuers, as well as for merchants.”

In a letter, CUNA President and CEO Bill Cheney notedl the Federal Reserve Board chairman’s “candid assessment” by the Fed that the agency would not meet the statutory April 21 deadline for the issuance of debit interchange fee standards.

However, Cheney also pointed out that, as a result, the final rule will now be issued much closer to the implementation date of July 21 – and that’s problematic for credit unions and others. “We are very concerned there will be insufficient time for institutions, networks, and the marketplace to prepare for compliance with the final rule,” Cheney said.

The complete text of CUNA’s letter to the Fed’s Bernanke follows:

– – – – – – – – – – – – – – – –

March 30, 2011

The Honorable Ben S. Bernanke
Board of Governors of the Federal Reserve System
20th and C Streets, NW
Washington, DC

Dear Chairman Bernanke:

On behalf of the Credit Union National Association, I wanted to communicate with you following your recent statements and letters to Congress yesterday regarding the regulation of debit card interchange fees.   CUNA represents about 90% of the nation’s 7,600 state and federal credit unions which serve approximately 93 million members.

We applaud your willingness to try to help small issuers, as you indicated last week at a meeting of the Independent Community Bankers Association.  Also, we appreciate your candid assessment to Congress that it is not possible to meet the statutory April 21 deadline for the issuance of debit interchange fee standards.

However, because the Board’s final rule will now be promulgated closer to the July 21 effective date for the interchange standards and the issuance date for the routing and exclusivity provisions, we are very concerned there will be insufficient time for institutions, networks, and the marketplace to prepare for compliance with the final rule.

In light of all the concerns about the regulation of debit interchange fees, we firmly believe that a congressionally-mandated delay is not only reasonable but also necessary in order to ensure small issuers will not be harmed and consumers that rely on them will not be disadvantaged.

We urge the Board to work with Congress to support legislation that would delay implementation, allowing much needed time to consider these issues and develop rules that will ensure the outcome Congress intended for consumers and issuers, as well as for merchants.

Thank you for your attention to this very serious matter.

Best regards,
Bill Cheney
President and CEO
Credit Union Natl. Assn. (CUNA)
Washington, DC

cc: Secretary of the Treasury Timothy Geithner
Senate Banking Committee Chairman Tim Johnson
Senate Banking Committee Ranking Member Richard Shelby
House Financial Services Chairman Spencer Bachus
House Financial Services Committee Ranking Member Barney Frank
Special Advisor to the President Elizabeth Warren




“Credit unions have urged Fed Chairman Ben Bernanke to support a congressionally mandated delay in the implementation of the debit interchange law”. There is a HUGE lobbying effort to  delay the law from being implemented, and 17 senators have signed a bill to  delay the new rule by two years and require a one-year study. Since there were years of study prior to the law being signed by President Obama, and the committee has had many months to prepare the standards, you have to wonder how our leaders could have gotten it so grievously wrong that nothing can be done for years.

The biggest problem most banks have is the governement setting a maximum fee they believe is too low.  I think that is a critical area that needs to be focused on. In Florida, FPL, our local utility is allowed to make 9-11% profit. The banks are not being given the same consideration.

At a minimum, implementation may need to be delayed to enable the marketplace adequate time to meet compliance. My thoughts? The lobbyists have so much traction, there will be no debit fee relief for merchants in 2010. This will result in even higher profits for banks in 2011. Why? Because the debit network fees have been gradually increased in anticipation of future cuts.

Merchants who want to reduce costs by increasing debit, which is still cheaper than credit, can do so with CenPOS. CenPOS technology gives merchants the ability to offer discount incentives on customer purchases for using debit cards. Discounts are  automatically calculated and put on the customer receipt.

CenPOS sales: 954-942-0483

CenPOS videos:

CenPOS information request:

Durbin Amendment on interchange fees update

Durbin, Key House Conferees Reach Agreement on Interchange Fees
Monday, June 21, 2010

[WASHINGTON, D.C.] Assistant Senate Majority Leader Dick Durbin (D-IL) today announced that an agreement has been reached with key conferees on the Wall Street reform bill regarding his amendment regulating interchange fees. The agreement makes minor, clarifying changes to the language which passed the Senate 64-33, and responds to concerns raised by state governments regarding their use of prepaid and debit cards distribution of government benefits.

I’m pleased that we were able to reach an agreement which makes modifications which strengthen consumer protections and bring competition to a market where there is none,” Durbin said. “We addressed specific concerns of states serving the unemployed and firms serving the unbanked. This was a good faith effort with House conferees to face legitimate issues and resolve them fairly without surrendering our goals of bringing fairness to interchange fees and common sense regulation to the credit card industry. I applaud the leadership of Chairmen Frank and Dodd in reaching this milestone agreement.”

Under the agreement, the new language will be offered by the House to the Senate during the conference negotiations on the Wall Street reform package as early as tomorrow. It is expected to be debated and eventually accepted by the conference committee, subject to ratification by the Committee Chairmen, and become the final language regarding interchange fees. The conference committee hopes to finish its work on the bill this week and the House and Senate are expected to pass the final legislation before July 4th.

Summary of the modifications to the Durbin interchange amendment:

  • Government administered cards
The Senate-passed amendment would regulate the interchange fees associated with debit or prepaid cards issued by large banks on behalf of government-administered payment programs (e.g., unemployment insurance, TANF, child support).
The compromise exempts federal, state and local government program debit and prepaid cards from interchange regulation, provided that after a two-year grace period the prepaid cardholding beneficiaries are not charged any overdraft fees or fees for the first monthly in-network ATM withdrawal.
The Senate-passed amendment defined interchange transaction fees to include debit card fees that are established by a payment card network (e.g., Visa and MasterCard) and that accrue to either the card-issuing bank or to the network itself.
The compromise provides that the Fed cannot regulate network fees (i.e., the fees that Visa and MasterCard charge and that accrue to themselves) except to ensure that the fees are not used to circumvent interchange fee regulation. These changes are a different way of accomplishing the same goal of protecting consumers from loopholes which would allow banks to raise fees to cover any loss in interchange revenue.
  • Reloadable prepaid cards
The Senate-passed amendment would regulate the interchange fees associated with reloadable prepaid debit cards, which are in common use by consumers who lack bank accounts.
The compromise exempts these cards from interchange regulation, provided that after a two-year grace period the issuing bank must not charge cardholders any overdraft fees or fees for the first monthly in-network ATM withdrawal. The compromise is an attempt to protect the unbanked from being driven to payday lenders and other non-bank entities for their financial needs. It further ensures that fees won’t be charged on those who can least afford them.
  • Fraud prevention costs
The Senate-passed amendment did not permit consideration of fraud prevention costs in the calculation of reasonable and proportional interchange rates.
The compromise provides that the Fed can adjust the interchange fee rate received by a particular card-issuing bank if the bank demonstrates that the adjustment is reasonably necessary to cover fraud prevention costs incurred by the bank. In order to qualify for this adjustment, the bank would have to comply with standards established by the Fed that would demonstrate that the bank is taking effective steps to reduce fraud, and the bank would also have to show that the adjustment it seeks is limited to those reasonably necessary fraud prevention costs. This compromise provides competition where there is currently none. Banks will be incentivized to efficiently and effectively prevent fraud while competing to provide the best protection for the lowest cost. These changes will make the market more efficient and allow for savings to be passed on to consumers.
  • Discounting between card networks
The Senate-passed amendment provided that card networks could no longer prevent merchants from offering customers a discount to use one card network vs. another (e.g., a discount to use Visa vs. MasterCard), and that this discount would apply in both the credit card and debit card contexts.
This provision has been removed from the amendment.  In its place, the compromise includes a provision directing the Fed to issue rules preventing card networks from requiring that their debit cards can only be used on one debit card network (thereby ensuring that merchants will have the choice of at least two networks upon which to run debit transactions). This provision also provides additional competition to a previously non-competitive part of the market. It allows merchants to choose the debit network with the lowest cost the opposite of the current system where merchants are forced to use a specific network with fixed prices.
  • Discounting between forms of payment
The Senate-passed amendment provided that card networks cannot prevent merchants from offering a discount for one form of payment vs. another (cash vs. check vs. credit vs. debit). The compromise clarifies that these discounts cannot be offered if the discounts differentiate between card issuers or card networks.
The compromise further clarifies that the discount must be offered to all prospective buyers and disclosed clearly and conspicuously to the extent required by federal and applicable state law, though a network would not be permitted to penalize a merchant for a discount that is provided in compliance with federal and state law. This change simply clarifies the language in the Senate bill which allowed merchants the ability to offer discounts for one form of payment over another.
  • Setting of maximum/minimum transaction thresholds for use of a credit card
The Senate-passed amendment provided that card networks could not prevent merchants from setting a minimum or maximum dollar amount for payment by credit card.
The compromise provides that such a minimum may not exceed $10, with authority given to the Fed to increase that dollar amount. The compromise also limits the ability to set maximums for payment by credit card to the Federal government and colleges and universities. The compromise further clarifies the Senate language and establishes that a minimum payment not exceed $10, matching laws currently on the books in a number of states.
  • Non-discrimination between cards issued by different banks
The Senate-passed amendment did not change the existing prohibition in the operating rules of Visa and MasterCard against card issuer discrimination.
The compromise amendment contains a rule of construction affirmatively stating that nothing shall be construed to authorize any person to discriminate between debit cards or between credit cards on the basis of the issuer who issued the card.  This language further clarifies the Senate passed language regarding non-discrimination between card issuers.
  • Authority of the Federal Reserve Board vs. the Consumer Financial Protection Agency/Bureau
The Senate-passed amendment provided for regulatory authority under the amendment to migrate to the Consumer Financial Protection Agency/Bureau after the CFPA/B is established.
The compromise provides that regulatory authority under the amendment shall remain with the Fed.
  • Non-applicability to USDA nutrition assistance program EBT cards
The Senate-passed amendment was silent on the applicability of the amendment to USDA’s nutrition assistance programs in which interchange fees are not charged for electronic benefit transfer (EBT) transactions.
The compromise makes clear that nothing in the amendment shall apply to these nutrition assistance programs.

Durbin worked closely on these changes with House and Senate conferees including: Chairmen Dodd and Frank, Rep. Meeks, Rep. Maloney, Rep. Gutierrez and Rep. Welch.

Reference original blog post

Senate Approves Debit-Card Swipe-Fee Limits in Bill

Follow the Durbin Amendment in Congress Bill Summary & Status 111th Congress (2009 – 2010)