| Per the Electronic Transactions Association: Senate Adopts Interchange Amendment |
| Despite success in getting the U.S. Senate to require 60 votes for passage, the Durbin interchange amendment to the financial reform bill was adopted by a 64-33 margin Thursday night. Sponsored by Sen. Richard Durbin (D-IL), the measure gives the Federal Reserve authority to regulate interchange fees on debit transactions, using a "reasonable and proportional" standard that gives the Fed plenty of room for interpretation. The amendment also allows retailers to use discounts to steer consumers to networks charging lower fees, to establish minimums and maximums for credit card purchases, and to offer cash discounts. If the Senate, as appears likely, passes the financial reform measure, it will have to be reconciled with a House version that does not include the Durbin provision. ETA Chief Executive Officer Carla Balakgie said, in a statement , that the association and its members were "disappointed" by the vote and "very concerned about the impact it will have on many types of businesses in the electronic payments chain." Connected Pay Q and A: Q: How will my business be affected by the Fed changing/influencing rates? A: Connected Pay clients do not need to worry about renegotiating rates as our rates move with interchange. You can feel comfortable knowing that as soon as the card networks adjust debit interchange lower, your rates will automatically move based on the Interchange + cost structure. Those merchants who are using the Connected Pay system with their old processor should consider discussing their rates with Connected Pay to ensure they receive the benefit of the decreased interchange rates. Q: What is the real life impact on my business of the financial reform? A: Connected Pay, in general, believes businesses will not be affected by the passage of this bill. Consumers may feel an impact of not being able to purchase certain goods due to a merchant requiring a specific dollar threshold to be met before a transaction can be processed. However, the majority of merchants know that if the consumer receives a positive experience through payment convenience, the merchant will benefit from the consumer's repeat business and most important, become a referral source for the merchant. |
