Retailers reduce credit union debit interchange income

by: Karen Bankston

You may be noticing the latest impact of the Durbin Amendment to the Dodd-Frank Act on your credit union’s interchange fees.

It appears Walmart and some other large retailers have begun processing signature debit transactions as “PINless PIN” transactions, thus reducing interchange fees—and credit union revenue—even when members opt to sign on the signature pad.

The giant chain may be at the head of the pack of merchants aiming to reduce card processing expenses by adjusting the routing logic on their point-of-sale terminals to submit debit charges of $50 or less as PIN transactions whether consumers key in a code or sign for their purchases.

“Merchants are beginning to exercise their new transaction routing freedoms, made possible through the Durbin Amendment, which gives retailers the option to do network routing as they see fit,” says Ryan Rackley, director with CUES Supplier member and strategic provider Cornerstone Advisors, Scottsdale, Ariz.

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