WASHINGTON – Implementation of the Durbin Amendment’s cuts in debit interchange fees cost the biggest credit unions and banks billions of dollars in lost revenues, according to a new survey published this morning by the Federal Reserve.
Average fees per transaction received by the biggest banks and three credit unions—Navy FCU, Pentagon FCU and North Carolina SECU—fell 45% for the fourth quarter to 23 cents from 43 cents two years before, the Fed reported.
But average fees for every other card issuer—including 99% of all credit unions—remained the same at 43 cents, raising questions about concerns of credit unions and banks over the debit fee rule.
The report also found that several credit union-owned networks, including Alaska Option and Credit Union 24, pay among the lowest fees to card issuers per PIN debit transactions, 17 cents and 18 cents, respectively. STAR, PULSE, MAESTRO and NetWorks pay 24 cents, the highest fees. Those figures range from 0.27% of an average transaction (for Alaska Option) to an average of 0.71% for NetWorks.
For signature debit, MasterCard and Visa both charged merchants the same, 24 cents, and Discover 17 cents. That amounts to around 0.63% of the value of each transaction. The Fed’s survey covered the period Oct. 1, 2011, when the Durbin Amendment went into effect, and Dec. 31.
There were approximately 46.7 billion debit card transactions in 2011, with a value of more than $1.8 trillion. This was a 24% increase from the number of transactions in 2009 (37.6 billion) and a 27% increase from the value of transactions in 2009 ($1.4 trillion).
Signature debit transactions represented about 63% of transaction volume and 61% of transaction value in 2011; the remainder were PIN debit transactions.
