I just went door to door and asked 75 merchants about the Durbin ammendment. Only two had even heard about it. Neither of them cared for the explanation. In fact, they were kinda rude and probably thought I was a salesman.
Despite flaws in my data sample size, or the "door to door" canvassasing... the fact is only two people I spoke wtih even heard of this ammendment. Merchants "passing the savings" on to the consumers will NEVER happen, because they don't even know about it.
I guess what Kevin forgot to advise you of, was that as long as you don' use a larger bank, with assets of over $10billion-you still get to keep your rewards. I do with MainSource Bank. And did you know that some of these banks are charging up to 2.95% interchange + $0.25 transaction fee on their debit/check card transactions? Seriously? All they are doing is moving your money from your checking account to the merchant's. Fancy money laundering.
The crazy part to me is that it will discourage the use of debit cards which are like using money you actually HAVE by doing away with the rewards benefit. Instead, people who love to get rewards will turn to credit cards causing many who lack spending control to go further into debt. How does this help this nation's economy?
Just realized that I stopped getting my Chase Reward points. Guess I use the remaining amount to buy blood pressure medication from all the BS legislation coming out of DC.
Kevin, I love this video, but you missed one important part that will probably make you think this amendment sucks even more! Merchants do not deal directly with Visa or Mastercard, or even banks, they deal with Processors like First Data. This amendment did not include any regulation requiring processors to pass these savings on to merchants. 80% of small business are on Tiered Pricing Structures and will see no benefit at all! Processors Profits will simply go up!
and oops... one thing about that $4 that's missing... interchange is broken down into TWO places. 12 cents per transaction does NOT mean that the transaction will only cost 12 cents. Debit cards are ALSO charged a percentage. The transaction fee is ONLY for the process of the communication. There is a discount rate AND transaction fee. So a card will now be 1.54% PLUS the 12 cents. The only thing capped will be the communication fee. LOL again, they should just stay out of it.
Sadly, this is a case of the govt getting involved in private industry YET AGAIN when it shouldn't. Their goal was to piss on the banks and all they did was INCREASE profits to them. LMFAO ALL THE WAY TO THE BANK!
so this is how it breaks down... I charge a merchant 20 cents per transaction. Interchange is (let's say) 15 cents. The profit is now a nickle for every time the card is swiped. LOWER it to 12 cents and now the profit is 8 cents! There will be no passing on savings to a customer because the merchant will not be seeing any savings out of it. NOR do merchants pass on savings on processing fees anyway. I saved one of my merchants thousands of $ monthly and they didn't lower prices on anything.
alright.. anyone care to hear from someone in THIS business? Dick Durbin is a moron. First of all, let's call it what it really is... AN ATTEMPT to limit bank profits. What he SAID was it was to "help" the merchant with fees. He's an idiot. What he DID was NOTHING for the merchant. If the interchange fee was 15 cents before and now it's 12 cents, all it did was INCREASE my own profit. Banks don't set interchange in the first place. VISA/MC does. BANKS charge interchange PLUS a fee (cont)
@TheJoozie Well, actually Banks do set interchange fees on Debit / Check Cards and the interchange fee is not $0.15 only, it is also a percentage right now, which is around 1.09% I just read the entire amendment last night and here are the numbers. The average transaction is $38.00 the average bank interchange cost is $0.44 and the Durbin Amendment as passed is going to cap this at $0.21 plus a .05% fee.
@durbinamendment Visa/Mastercard sets interchange fees... stakeholders do. Some banks that issue cards are stakeholders, so in that respect, yes, the banks have SOMETHING to do with it. But it is supposed to be bifricated.
Since the legislation did not pass to delay the implementation of the interchange cap, we are going to see what retailers do. Ironically, accepting debit cards also ensure guaranteed payment from consumers...its cheaper to accept bankcards compared to bad check writers & trying to recover merchandise or wait for county prosecutors to criminally charge bad check writers. I agree the Durbin amendment does suck!
There is no requirement to give anything back to consumers. Some retailers have already prepared stock holders for record profits after the bill passed. My big fear is that retailers will favor large bank cards that are cheaper for them then small banks & credit unions, which could single handely knock them out of the market. Credit unions have already proven they give back to consumers through their non-profit status. So do you believe the guys trying to make a buck or trying to save you one?
@meliakeller it's not possible for a retailer to favor one card over another. The card fees are not broken down by who issues the card. They are broken down by the way VISA/MC issue them. There are different interchange rates for different types of cards but it has nothing to do with what bank or credit union issues them.
very informative video. Thank you for posting it. This issue isn't about consumers, it's about business to business. Retailers don't have to accept debit cards but they know consumers demand it. When has it ever been a good idea for government to set prices in the market? Maybe they should set the price for how much retailers can charge to their customers. i'm sure a reasonable price can be set for all good and services.
@davidhaith all retailers accept debit cards... it's just a matter of how they process the card. In most cases taking debit with the pin number entered is far cheaper than running it through like a credit card. Plus there's no chargebacks. If you buy something with your debit card, enter your pin and then claim your card was stolen, the bank will see that your pin number was used and basically tell you tough chit. It's nearly impossible to get $ back when your pin was used.
Nice video Kevin...the one modification I would suggest is to adjust the price of your cd purchase post-Durbin. It is more likely that the pice of your cd will be $196.12, not $200. No need to wait for your rewards from the bank...you get to keep YOUR money in YOUR pocket without the banks deciding what they want to give you back.
@window0086 I see your point, but it's not going to happen. Wait for this thing to go into law in July, and then tell me if you see prices drop by 1-2% at any of your favorite stores. I will be amazed if any of them drop prices.
@window0086 Come on window... get real. Retailers are not going to pass this on to customers. When CFO of Home Depot was asked "What does the Durbin Amendment mean to you?" His response was, "35 million to the bottom line." It is naive to think that retailers will pass this on. Banks are way more competitive than retailers. Therefore, banks are required to find ways to retain customers more so than the Wal-Mart, Home Depot, and Krogers of the world.
Actually Kevin's diagrams are a simplistic but basically an accurate representation of a transaction flow of how debit and interchange works. You're getting a little too complicated for this story, maybe not for a compliance officer :)
Kevin, You seem like a nice guy and your video seems light hearted. But your comments about this industry and diagrams are not all accurate. You seem to have some grasp of electronic payments basics, but do not know speciifcs. I would suggest getting all the facts straight before you post. You have misspoken on the elements of Interchant, Fundemential Fee Components of Authorization, Capture, and Settlement, as well as the operating rules and guidlines of the card brands. GET FACTS FIRST
I just went door to door and asked 75 merchants about the Durbin ammendment. Only two had even heard about it. Neither of them cared for the explanation. In fact, they were kinda rude and probably thought I was a salesman.
Despite flaws in my data sample size, or the "door to door" canvassasing... the fact is only two people I spoke wtih even heard of this ammendment. Merchants "passing the savings" on to the consumers will NEVER happen, because they don't even know about it.
compugasm 4 weeks ago
This has been flagged as spam show
well it happened... well that's just grate! :(
serpentboy201269 4 months ago
well it happened... well that's just grate! :(
serpentboy201269 4 months ago
I guess what Kevin forgot to advise you of, was that as long as you don' use a larger bank, with assets of over $10billion-you still get to keep your rewards. I do with MainSource Bank. And did you know that some of these banks are charging up to 2.95% interchange + $0.25 transaction fee on their debit/check card transactions? Seriously? All they are doing is moving your money from your checking account to the merchant's. Fancy money laundering.
KatieGsMama 4 months ago
The crazy part to me is that it will discourage the use of debit cards which are like using money you actually HAVE by doing away with the rewards benefit. Instead, people who love to get rewards will turn to credit cards causing many who lack spending control to go further into debt. How does this help this nation's economy?
tedstadpole 5 months ago
Just realized that I stopped getting my Chase Reward points. Guess I use the remaining amount to buy blood pressure medication from all the BS legislation coming out of DC.
Champizfast 5 months ago
Kevin, I love this video, but you missed one important part that will probably make you think this amendment sucks even more! Merchants do not deal directly with Visa or Mastercard, or even banks, they deal with Processors like First Data. This amendment did not include any regulation requiring processors to pass these savings on to merchants. 80% of small business are on Tiered Pricing Structures and will see no benefit at all! Processors Profits will simply go up!
durbinamendment 7 months ago
Nice Durbin Amendment for Dummies video, I'm still mad at Chase for taking away my rewards :(
spongebobyankee 7 months ago
and oops... one thing about that $4 that's missing... interchange is broken down into TWO places. 12 cents per transaction does NOT mean that the transaction will only cost 12 cents. Debit cards are ALSO charged a percentage. The transaction fee is ONLY for the process of the communication. There is a discount rate AND transaction fee. So a card will now be 1.54% PLUS the 12 cents. The only thing capped will be the communication fee. LOL again, they should just stay out of it.
TheJoozie 8 months ago
Sadly, this is a case of the govt getting involved in private industry YET AGAIN when it shouldn't. Their goal was to piss on the banks and all they did was INCREASE profits to them. LMFAO ALL THE WAY TO THE BANK!
TheJoozie 8 months ago
so this is how it breaks down... I charge a merchant 20 cents per transaction. Interchange is (let's say) 15 cents. The profit is now a nickle for every time the card is swiped. LOWER it to 12 cents and now the profit is 8 cents! There will be no passing on savings to a customer because the merchant will not be seeing any savings out of it. NOR do merchants pass on savings on processing fees anyway. I saved one of my merchants thousands of $ monthly and they didn't lower prices on anything.
TheJoozie 8 months ago
alright.. anyone care to hear from someone in THIS business? Dick Durbin is a moron. First of all, let's call it what it really is... AN ATTEMPT to limit bank profits. What he SAID was it was to "help" the merchant with fees. He's an idiot. What he DID was NOTHING for the merchant. If the interchange fee was 15 cents before and now it's 12 cents, all it did was INCREASE my own profit. Banks don't set interchange in the first place. VISA/MC does. BANKS charge interchange PLUS a fee (cont)
TheJoozie 8 months ago
@TheJoozie Well, actually Banks do set interchange fees on Debit / Check Cards and the interchange fee is not $0.15 only, it is also a percentage right now, which is around 1.09% I just read the entire amendment last night and here are the numbers. The average transaction is $38.00 the average bank interchange cost is $0.44 and the Durbin Amendment as passed is going to cap this at $0.21 plus a .05% fee.
durbinamendment 7 months ago
@durbinamendment Visa/Mastercard sets interchange fees... stakeholders do. Some banks that issue cards are stakeholders, so in that respect, yes, the banks have SOMETHING to do with it. But it is supposed to be bifricated.
TheJoozie 7 months ago
Since the legislation did not pass to delay the implementation of the interchange cap, we are going to see what retailers do. Ironically, accepting debit cards also ensure guaranteed payment from consumers...its cheaper to accept bankcards compared to bad check writers & trying to recover merchandise or wait for county prosecutors to criminally charge bad check writers. I agree the Durbin amendment does suck!
Preluding99 8 months ago
There is no requirement to give anything back to consumers. Some retailers have already prepared stock holders for record profits after the bill passed. My big fear is that retailers will favor large bank cards that are cheaper for them then small banks & credit unions, which could single handely knock them out of the market. Credit unions have already proven they give back to consumers through their non-profit status. So do you believe the guys trying to make a buck or trying to save you one?
meliakeller 9 months ago
@meliakeller it's not possible for a retailer to favor one card over another. The card fees are not broken down by who issues the card. They are broken down by the way VISA/MC issue them. There are different interchange rates for different types of cards but it has nothing to do with what bank or credit union issues them.
TheJoozie 8 months ago
very informative video. Thank you for posting it. This issue isn't about consumers, it's about business to business. Retailers don't have to accept debit cards but they know consumers demand it. When has it ever been a good idea for government to set prices in the market? Maybe they should set the price for how much retailers can charge to their customers. i'm sure a reasonable price can be set for all good and services.
davidhaith 9 months ago
@davidhaith all retailers accept debit cards... it's just a matter of how they process the card. In most cases taking debit with the pin number entered is far cheaper than running it through like a credit card. Plus there's no chargebacks. If you buy something with your debit card, enter your pin and then claim your card was stolen, the bank will see that your pin number was used and basically tell you tough chit. It's nearly impossible to get $ back when your pin was used.
TheJoozie 8 months ago
Nice video Kevin...the one modification I would suggest is to adjust the price of your cd purchase post-Durbin. It is more likely that the pice of your cd will be $196.12, not $200. No need to wait for your rewards from the bank...you get to keep YOUR money in YOUR pocket without the banks deciding what they want to give you back.
window0086 10 months ago
@window0086 I see your point, but it's not going to happen. Wait for this thing to go into law in July, and then tell me if you see prices drop by 1-2% at any of your favorite stores. I will be amazed if any of them drop prices.
MrThousandaire 10 months ago
@window0086 Come on window... get real. Retailers are not going to pass this on to customers. When CFO of Home Depot was asked "What does the Durbin Amendment mean to you?" His response was, "35 million to the bottom line." It is naive to think that retailers will pass this on. Banks are way more competitive than retailers. Therefore, banks are required to find ways to retain customers more so than the Wal-Mart, Home Depot, and Krogers of the world.
henrythurstonallen 8 months ago
Actually Kevin's diagrams are a simplistic but basically an accurate representation of a transaction flow of how debit and interchange works. You're getting a little too complicated for this story, maybe not for a compliance officer :)
0747rich 10 months ago
Who's Rachel Wolf? :)
nunyabizness32 11 months ago
Kevin, You seem like a nice guy and your video seems light hearted. But your comments about this industry and diagrams are not all accurate. You seem to have some grasp of electronic payments basics, but do not know speciifcs. I would suggest getting all the facts straight before you post. You have misspoken on the elements of Interchant, Fundemential Fee Components of Authorization, Capture, and Settlement, as well as the operating rules and guidlines of the card brands. GET FACTS FIRST
tappmenow 11 months ago
i actually really appreciate this video, thanks :]
Miyums 11 months ago
Informative for people who are out of the loop.
RepresentNYC 11 months ago