The Durbin Amendment and Your Debit Fees

If a lot of your customers pay with debit cards, there's a federal law working in your favor that most shop owners have never heard of. It's called the Durbin Amendment, and it puts a ceiling on what big banks can charge on debit transactions. The catch is that the savings don't always make it to your statement. This guide covers what the Durbin Amendment does, which cards it covers, and how to check whether you're actually getting the benefit.

What the Durbin Amendment is

The Durbin Amendment was part of the Dodd-Frank Act, passed in 2010 and named for the senator who sponsored it. It added Section 920 to the Electronic Fund Transfer Act and told the Federal Reserve to make sure debit interchange fees are "reasonable and proportional" to what it costs the bank to handle the transaction.

The Fed's rule that carries this out is called Regulation II. It took effect on October 1, 2011.

Quick refresher: every time a customer pays with a card, the bank that issued it collects a fee called interchange. It's usually the biggest piece of what you pay to accept cards, and your processor doesn't set it. The Durbin Amendment is one of the few places where the law caps it.

What the cap actually is

For covered debit cards, Regulation II limits interchange to:

• 21 cents per transaction, plus
• 0.05% of the sale amount, plus
• up to 1 cent more if the bank meets the Fed's fraud-prevention standards.

Here's what that looks like in practice. On a $100 debit sale, the most a covered bank can collect is 21 cents, plus 5 cents, plus 1 cent. That's 27 cents. On a $1,000 repair ticket it's 21 cents, plus 50 cents, plus 1 cent, so 72 cents.

That's the whole point: on regulated debit, interchange is mostly a flat few cents, not a percentage that grows with the ticket.

Which cards are covered (and which aren't)

The cap only applies to debit cards from banks that, together with their affiliates, have $10 billion or more in assets. Those are "regulated" cards.

Plenty of debit cards are exempt:

• Smaller banks and credit unions. Under $10 billion in assets, the cap doesn't apply, and interchange can run noticeably higher.
• Government benefit cards issued under a government-administered program.
• Certain reloadable prepaid cards that meet the Fed's criteria.

Credit cards aren't covered at all. The Durbin Amendment is a debit rule only.

You can't tell regulated from exempt by looking at the card, and you don't need to. On the right pricing model, your statement sorts it out for you.

The other half: debit routing

The Durbin Amendment didn't just cap fees. It also requires every debit card, from banks of any size, to work on at least two unaffiliated networks. And it bars banks and networks from stopping a merchant from choosing which of those networks a transaction runs over.

In October 2022 the Fed made it explicit that this applies to online and other card-not-present debit transactions too, effective July 1, 2023.

In plain terms: when a debit card can go down two roads, you're allowed to send it down the cheaper one. Whether that happens depends on your processor and equipment, so it's a fair question to ask.

Is the cap changing?

Maybe, but not yet. Two things are in motion:

• A proposal to lower it. In October 2023 the Fed proposed cutting the base cap from 21 cents to 14.4 cents, along with smaller changes to the other pieces. As of this writing, that proposal hasn't been finalized.
• A court challenge. In August 2025, a federal district court in North Dakota ruled that the Fed's fee standard wasn't what the law allowed, but put its own ruling on hold while the Fed appeals. The appeal is in front of the Eighth Circuit.

As of this writing, the 21-cent cap is still in force. If it changes, you'll only see it on your statement if your pricing passes interchange through to you.

Where the Durbin savings disappear

This is the part that costs shop owners real money. A low cap only helps you if your processor charges you based on the actual cost.

Flat-rate pricing. You pay the same percentage on a regulated debit card as on a premium rewards credit card. The processor's cost on that debit swipe is a few cents. Yours isn't. The difference is the processor's.

Tiered pricing. The processor sorts transactions into "qualified," "mid-qualified" and "non-qualified" buckets. A cheap regulated debit card can land in the same bucket, at the same rate, as a far pricier credit card.

Interchange-plus pricing. You pay the real interchange plus a fixed, disclosed markup. That 27 cents of interchange on a $100 debit sale stays 27 cents on your statement. This is the model where the Durbin Amendment actually shows up for you.

One more thing: debit and prepaid cards can never be surcharged, even when the customer runs them as credit. So if you're thinking about passing card costs on, debit volume is something you have to price right, not pass along. Surcharging rules for credit cards also vary by state.

What to do next

Pull one month's statement and figure your effective rate: total fees divided by total card sales. Then look at how debit is listed. If you see regulated debit broken out with its own low interchange, good. If everything shows one blended rate, the Durbin Amendment is probably saving your processor money instead of you.

Our free rate checker does that math in a couple of minutes. If the number looks high, send a statement over and we'll show you what you're paying on debit versus what the Durbin Amendment cap says it should cost. No pressure, and nothing out of your pocket to find out.

This is general information, not legal advice; surcharging rules change and vary by state.