Note: existing subscribers have all notifications turned off by default. To update notifications, please visit Member Login –> Notification Preference above.
© Starpoint LLP, 2022. No part of this site, blog.starpointllp.com, may be reproduced in whole or in part in any manner without the permission of the copyright owner.
What are the new Durbin’s legislative prospects? A: Not at all likely (<10% probability)
Top retailers spent this week meeting with Bank CEOs trying to convince them to support the new Durbin legislation. Their pitch was to enable bi-lateral deals, “new products” and avoid network rules (see blog). Banks did not seem to bite, as they remembered the lessons of Durbin 1:
- Only largest merchants benefited from dual routing
- Consumers lost in debit rewards (ie keep the change), increased bank account fees, and no merchant pass-through of savings
- Acquirers/processors did not pass through fee reductions to most merchants
- Networks recovered lost revenue through merchant fees
- Large banks lost competitive advantage as smaller “exempt” banks under $10B operated under different rules
- See WSJ article