October 3rd, 2011 • Posted by KitKat • Permalink
Starting October 1st, 2011 all credit card processors start making more money on your restaurant. The Durban Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has officially gone into effect.
It's important for restaurants to know that the law caps the fees that card networks like Visa and Mastercard can charge for debit card transactions. The intent is to benefit consumers and small businesses. However, one tiny flaw is that merchants don't buy processing from Visa; they buy processing from "acquirers." So, starting October 1st your acquirer's cost to process debit cards drops significantly, but the amount they currently charge you has very likely stayed the same.
Since the average restaurant does a considerable number of card transactions as debit, the change is likely to be substantial. What to do? Make sure that whomever processes your credit cards is charging you "interchange plus" pricing instead of "tiered" pricing. If your transactions are processed as "qualified", "mid-qualified" or "non-qualified" it is very likely that you will either save a lot of money or become a very profitable customer for your processor.
If you need some help figuring it out please give us a call. We will be happy to look at your statements and point you in the direction of a processor who will save you a lot of money.
