Merchants, not consumers, are already reaping the rewards of the Durbin Amendment, which became official on Oct. 1, according to new data.
Princeton, New Jersey’s Heartland Payment Systems showed that its merchant customers received nearly $2 million in the first three days after the cap on interchange fees went into effect, Forbes.com reports.
Heartland, which processes debit and credit card payments for merchants, said that it passed $1,779,568 worth of debit interchange reduction to its merchants from Oct. 1 through Oct. 3.
Restaurant merchants were the biggest beneficiaries as Heartland passed them $671,652.
Heartland processes debit card payments for 250,000 merchants and has been a longtime supporter of the Durbin Amendment, which it estimates will save the average merchant $1,000 in the first year alone, Forbes.com reports.
Merchants were unhappy earlier this year when the Federal Reserve released its final language on the rule and complained that the Fed to did not go far enough in capping the fees banks could charge them for debit card swipes.
Financial experts have said that merchants will likely react by not passing on their savings to the consumers.
Madeline Aufseeser, a senior analyst at Aite Group LLC, said that banks and card companies will be hit hard on the new fee caps.
“Meanwhile, the consumer stands to be the biggest loser," Augseeser said, WinShareServices.com reports. “Banks will likely raise the direct cost of banking to make up for lost revenue, while merchants are unlikely to pass any of their savings on to consumers.”