The Durbin Amendment went into effect in 2011, as part of broad reforms planned and put in place to protect consumers through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The main purpose of the amendment was to lower interchange fees on debit cards and credit cards for retailers. The idea is, retailers pay lower fees, so they lower prices for their customers. Previously, those fees had the potential to hurt business owners, especially smaller businesses, who did not have the consumer base to bargain for lower fees, unlike much large business like Wal-Mart.
Since those regulations were put in place, it seems that across the board, no one is winning. Business owners pay less fees, but many businesses still haven’t lowered prices for their customers. The main reason for the changes—or lack of changes—is the banks. Banks have lessened the amount of incentives attached to their accounts, like no minimum charges, no free accounts, or rewards for transfers and balances, in response to regulations that limit overdraft charges and interchange, or swipe fees. Without a lot of these former incentives, there’s no reason for the business owners to charge less for their products, because they’re still making less money. Their customers end up paying a bit more across the board, because their businesses need to raise prices to keep up the extra costs.
Even with the amendment in place, in an act specifically designed to help and protect consumers, it seems as if the only people still coming out on top are banks and big businesses with more bargaining power. The best thing for business owners to do? Get some feedback from your customers, try to keep prices low, and see if your bank can do anything to make your banking needs a bit easier. Anything you can save for your business, is what you can save for your customers.