In 2010, Congress passed the Dodd-Frank Act, and buried inside it was a provision called the Durbin Amendment. For merchants, it was supposed to be one of the biggest fee reductions in a generation: debit card interchange was capped at roughly 0.05% plus $0.22 per transaction for cards issued by large banks.

Fifteen years later, most small merchants still have no idea the savings exist — and many never see a dime of it. Here's why.

What Durbin actually did

Before 2010, debit interchange worked just like credit interchange. Visa and Mastercard set the rates, and they looked a lot like credit card pricing — around 1–2% plus a per-transaction fee. That was great for banks but bad for merchants, especially grocery stores and gas stations where debit is the dominant payment type.

The Durbin Amendment changed two things:

  • Debit interchange for cards issued by banks with more than $10 billion in assets was capped at 0.05% + $0.22 per transaction
  • Merchants were guaranteed the right to route debit transactions over at least two unaffiliated networks, so they could pick the cheaper one

The intent was clear: regulated debit should be dramatically cheaper than credit.

Why you're probably not getting the savings

The rate cap applies to interchange — the wholesale cost your processor pays the card network. It doesn't apply to what your processor charges you. That's where the savings disappear.

On a flat-rate account (think Square, Stripe, or a processor quoting "2.6% + 10¢ for everything"), the processor charges you the same rate regardless of whether the card is a Durbin-regulated debit card or a high-reward travel credit card. Their cost on that debit swipe might be $0.27 on a $100 sale. Your cost is $2.70. The processor pockets the difference.

On an interchange-plus account, you pay the actual interchange rate plus a fixed markup. Durbin debit hits your statement at around $0.27 — exactly what your processor pays. You keep the savings.

The real-world impact

A pizza shop doing $40,000 a month in sales, with 60% of that on debit cards and an average ticket of $25:

  • Flat rate (2.6% + 10¢): About $736/month in processing fees
  • Interchange-plus (0.3% + 10¢ over interchange): About $420/month in processing fees

Same merchant. Same transactions. The $316/month difference — roughly $3,800/year — is almost entirely Durbin savings the flat-rate processor is keeping for themselves.

How to tell if you're getting Durbin pricing

Pull out a recent statement and look at the interchange or "cost" section. You want to see line items with names like:

  • CPS/Retail Debit — Regulated (Visa)
  • Merit III Base — Regulated (Mastercard)
  • Regulated Debit Consumer

If you see those categories and the effective rate on them is close to 0.05% + $0.22 per transaction, you're getting the benefit. If your statement doesn't break out interchange at all — just a single bundled rate — you're almost certainly not.

What to do about it

Three moves, in order:

  • Check the card mix on your statement. If more than 30% of your volume is debit, Durbin savings become a big deal. Ask for a rate review.
  • Ask your processor for an interchange-plus quote. You may not need to switch — plenty of processors will convert your account when asked, because the alternative is losing you.
  • If you're on Square or Stripe and can't move off flat rate, know going in that you're trading simplicity for margin. That's a fair trade at low volumes. Above about $15,000/month, the math usually flips.

The bigger lesson

Durbin is a reminder that the rate your processor quotes you is almost never the same as the rate they pay. The gap between the two is where their profit lives — and where yours goes to die.