Large US banks are exploring acquisitions that would let them sidestep federal caps on debit-card interchange fees, a regulatory workaround that could reshape the payments industry and unlock billions in revenue that’s been off-limits since 2011.
The Durbin problem, explained
The Durbin Amendment, part of the Dodd-Frank Act, went into effect on October 1, 2011. It directed the Federal Reserve to cap debit interchange fees for banks with more than $10 billion in assets.
Every time you swipe your debit card, your bank charges the merchant a small fee. Before Durbin, big banks averaged about 50 cents per transaction. After the regulation kicked in, that dropped to roughly 22 cents.
Smaller banks, the ones under $10 billion in assets, are exempt. They still collect an average of about 43 cents per swipe. That’s nearly double what their larger competitors earn on identical transactions.
