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The Real Durbin Amendment Winners? High-End Stores

NEW YORK (MainStreet) — The Durbin Amendment may have limited swipe fees  in an effort to help merchants make more money on debit card purchases, but the caps don’t benefit all retailers equally.

In fact, according to a report from Javelin Strategy and Research, merchants with an average transaction of less than $11 actually pay more now to take debit cards.

“Businesses with small dollar transactions, like a coffee shop, are suffering under Durbin,” says Beth Robertson, Javelin’s director of payments research. She says that under the new fee structure, retailers pay 22 cents for each $8 dollar transaction. Prior to the swipe fee limits, a purchase like that would have cost them 14 cents.

Javelin‘s figures are based on the rates that went into effect on Oct. 1, 2011. Its report did find that the Durbin Amendment halved transaction-fee-related expenses for merchants with an average sale of $38.03.

However, those who really benefit are the high-end retailers. Prior to Durbin, $1,000 purchases would have cost a merchant $15.02 in fees. They now only have to pay 72 cents per transaction.

Of course, purchases that high aren’t commonly made with debit cards. Data provided from Mint found the average transaction amount for debit card purchases in 2010 was $71.

—Jeanine Skowronski is staff reporter for MainStreet. You can reach her by email at Skowronski.jeanine@thestreet.com, or follow her on Twitter at @JeanineSko.

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