Virtually all retail businesses accept credit cards because doing so is proven to increase total sales. At this writing the U.S. House and Senate conference committee continues to work on the controversial merchant services reform legislation. And a House-backed revision of the Durbin amendment — which gives the Federal Reserve authority to regulate credit card processing, seems likely to remain part of the final merchant account legislation.
All those that accept credit cards anxiously await news of how the Durbin “”merchant services”” amendment will affect how credit card processing at the point of sale (POS) is performed, and the impact on the merchant account. The “profit or loss” affect from the new legislation aimed at governing costs of merchant account services will directly impact how the credit card machine and credit card terminal are used.
Continue reading Credit Card Processing and the 2010 Financial Reform Act
How the “Act” will affect your Credit Card Processing
On June 21, 2010 Congress approved new regulations that will change credit card processing in America as we have known it since its inception in the 1960’s. Included in the Restoring American Financial Stability Act of 2010 (the “Act”), the regulations allow the Federal Reserve to cap debit card interchange at a level that’s “reasonable and proportional” to the cost of processing debit card transactions. Before retailers can accept credit cards they must apply for a merchant account. All Merchant accounts include contract terms which will be changed by the Act.
Since debit cards represent the majority of transactions in the US, the impact on merchant services via radical changes to the merchant account pricing and terms via this new government intervention is potentially significant, though difficult to predict. Continue reading Congress Approves Credit Card Processing Regulation Amendment