If your business uses PayPal or GoDaddy for e-commerce or has a tiered pricing structure for traditional credit cards, you WILL NOT capture the savings when the Durbin Amendment becomes law on July 21
The Durbin Amendment is set to become law on July 21 and will effectively lower the debit card interchange rate from an average of 44 cents per transaction to 12 cents per transaction. PayPal's second best merchant rate package is 2.2% plus 30 cents per transaction.
For a $100 debit card transaction done on your e-commerce website, you would currently pay $2.50 to Paypal. When July 21 comes around, you will still pay $2.50 to Paypal. If you were to switch to an 'interchange plus' platform like ours, you would pay $0.12 for the interchange rate plus our negotiated processing fee (call it 10 cents and 0.20%) for a total of $0.42. You would therefore capture the $2.08 per $100 transaction that Paypal otherwise keeps.
Tiered pricing for traditional merchant processing would yield similar results. Please contact me to discuss further.
