The Durbin Amendment is making a big impact in the debit card sector. The law states that financial institutions would only be paid about half of the previous rate on debit card swipe fees, lowering the rate from $0.44 per transaction to approximately $.021. However, to avoid hurting smaller institutions, the Durbin Amendment stated that financial institutions under $10 billion would not be affected. The latest figures show that small banks and credit unions receive $0.43 per debit card swipe.
This allows these smaller institutions to have a competitive advantage over bigger banks and keep their rewards programs intact. Numerous big banks have eliminated their free checking programs and no longer have rewards programs tied to debit cards. Many in the credit union industry have seen a large growth in their customer base because of the Durbin legislation.
Scott Post, SVP/Strategy and Delivery for Hanscom Federal Credit Union, states that, In anticipation of Durbin, we did restructure our debit card rewards program. It was always very popular but we wanted to add extra rewards and flexibility by including gift cards and electronic awards This has allowed Hanscom and many other credit unions to enjoy an increase in their revenue and customer base.