CU providers included in Fed’s 2014 interchange fee data
WASHINGTON (5/11/15)--A number of credit union servicers are included in the Federal Reserve’s debit card interchange fee data for 2014 that was released last week.
Interchange fees occur when a credit or debit card transaction takes place, and are how financial institutions are compensated for making cards available to merchants.
The fees are currently governed by the Durbin Amendment, part of the Dodd-Frank Act, which limits them to 21 cents, plus 0.05% multiplied by the value of a transaction. CUNA has held since the amendment was released that the Fed’s cap is too restrictive, and has pushed for it to be raised.
The Fed’s debit interchange fee data lists the average fee charged for transactions exempt from the interchange fee standard, as well as transactions covered by the standard.
The standard fee charged for an exempt transaction in 2014 was 43 cents (which represents 1.14% of average transaction value), and 23 cents per exempt transaction (0.59% of average transaction value).
The average fee charged on all transactions is 31 cents, which is 0.79% of the average transaction value.
Other highlights from the report include:
Average interchange fees per transaction have changed little since 4Q 2011, when the interchange fee took effect;
Average interchange fees per transaction varied considerably across networks, with some networks collecting more than twice as much as other networks within the same transaction category;
93.8% of prepaid card transactions (by value) were exempt from the interchange fee standard; and
- Prepaid card transactions exempt from the standard constituted 2.7% of transaction value for covered issuers.