Are you familiar with the Durbin Amendment? If you are a parking owner or operator who typically accepts debit and credit cards for parking payments, you should know about it.
Introduced to Congress in 2010, The Durbin Amendment was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Amendment limits transaction fees imposed on merchants by debit card issuers, with the goal of lowering per transaction debit interchange fees. The idea was that this reduction in fees would be passed on to the end consumer. The results of that mission were, however, varied.
A major issue with this initiative was that it did not take smaller transactions – like parking payments – into account. The fees on smaller transactions in fact went up resulting from this change. Keep in mind, this only impacts individuals paying with a debit card. However, today that includes a large portion of the population.
Organizations that accept debit cards for their parking fees (which is most organizations) should investigate how their merchant payment entity is managing these fees and if there are any opportunities to reduce these fees. As organizations today continue looking for ways to reduce their expenses, these processing fees could be significantly impacting the bottom line.
Be sure to have a discussion with your merchant processing vendor to learn about the transaction fees your organization is paying, and if there are opportunities to identify savings. Again, given that many transactions have relatively low fee amounts, the savings could be material for operations small and large. Moreover, be sure you are taking a closer look at your total monthly fees assessed and see how you can facilitate potential savings based on The Durbin Amendment and many new payment facilitators in the marketplace.