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Durbin Amendment’s oversights could have negative impact on small merchants

A leading credit card processing comparison website has warned that ill-prepared merchants will not see savings from fees mandated by the Durbin Amendment.

CardFellow.com warned that the Durbin Amendment only applies to card-issuing banks that receive interchange and makes no mention of payment processors or merchant acquirers that handle bank card processing for millions of merchants.

As a result of this oversight, merchants who use a bundled pricing model have no guarantee of savings from the interchange cuts. The only alternative is to change to a processor offering interchange plus pricing, Ben Dwyer, CardFellow.com's CEO, warned.

“If they don’t, any savings they would have seen as a result of Durbin will go to their processor,” Dwyer said.

Dwyer is encouraging merchants to avoid this scenario.

“Businesses should take a close look at their current processing statements," Dwyer said. "If they see the words qualified, mid-qualified, or non-qualified anywhere, they should act quickly and use CardFellow.com to get multiple bids from credit card processors based on interchange plus pricing—a pricing model that will allow them to reap the savings from the proposed Durbin rate cuts.”

Merchants should also examine their cancellation clause in their processor's contract to determine when and how they may terminate their agreement to prepare for obtaining a processor offering less expensive, more transparent interchange plus pricing.

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