Interchange regulation — Dies in committee?

August 2010

President Obama signed the Financial Services Reform Bill into law which included a provision drafted by Senator Dick Durbin that placed Debit card interchange rates under the direct scrutiny and control by the Federal Reserve. So it looked like debit card interchange rates would be cut and savings passed along to struggling businesses. But not so fast…the lobbyists for the financial institutions have successfully killed this interchange law in committee.

The American Banker reported on July 30 that the Senate Appropriations Committee removed the interchange amendment from the law and instead agreed to study the impacts of such legislation. So what was expected to be about 9 months until the interchange regulation provided relief to businesses in the form of Debit card interchange reductions, now the timeline is uncertain. Certainly this study methodology and results will be aggressively debated in committee further delaying any definitive actions. This basically means that interchange regulation and potential interchange reductions imposed by the Fed will not be coming soon to help your winery.

So what’s next?

As Visa, MasterCard and Discover typically update the interchange rates every April and October, it will be very interesting to watch what happens this October. Will the impact of the legislation make the card associations reticent to make any changes hoping that the status quo will further dim the spotlight on these fees? Will they increase credit card processing fees claiming higher risk or network maintenance costs to boldly make a statement that their fees are justified and costs are increasing over time? Or will they react to the underlying sentiment that resulted in the creation of the interchange reform bill and attempt to appease businesses by providing reductions to interchange rates? Being students of game theory this will be an interesting move, and it’s in the hands of the financial institutions to set the tone for the ongoing discussion. Question is will it benefit your business or theirs?

What does this all mean for businesses that accept credit cards? For now not much as we don’t expect any changes to the interchange rates until October, and then the typical expectation is the rates or fees typically increase slightly. With rare exception this has been the pattern and we don’t expect this pattern to change. The difference this time is that we had a national dialogue about interchange rates, so actions will be more closely monitored.

We at Winery Payment Solutions are always looking for ways to save our clients the most possible on their credit card processing. We provide interchange pass through pricing to all clients because this saves your business the most money on your credit card processing and reductions in interchange rates are directly passed along to our clients. If your winery does not have interchange pass through pricing with your existing processor, it’s time to make the leap to Winery Payment Solutions.

Here are just some of the money saving solutions that Winery Payment Solutions offers.

One Account for Everything

You don't need multiple accounts, statement and monthly fees for Visa, MasterCard, Discover and American Express. Stop paying additional monthly fees for statements when you can have a consolidated statement and one account for all your transactions. In addition you don't need a separate merchant account for E-Commerce, Retail sales and Mobile payments. All you need is one merchant account for all your sales channels and no additional fees.

Online Terminal

If you'd like to accept payments without a credit card machine to further reduce your costs and power your wine club, you can use our virtual terminal for all or some of your transactions. You can also connect a card reader and receipt printer to your PC and have credit card machine wherever you take your computer.

Electronic Checks

With our award winning check processing solutions you can scan a check and get paid fast. If you want to stop going to the bank every day to deposit checks, or you want to make sure a check is good before the customer leaves, our e-check solution is right for you.

Gift Cards

Offer your customers the option to buy and pay with gift cards. With every merchant account, you get the first 50 standard gift cards for FREE.

Low Cost Credit Card Machines

With any merchant account we offer credit card machines to meet your needs at the lowest prices possible. Don't fall for a free terminal, there will be fees charged later to make up for the "giveaway".

Merchant Service Advisor

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Interchange regulation — Dies in committee?

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