Say Goodbye to Debit Cards


Last modified: February 21, 2013
By:

Originally Published on March 11, 2011.

We’ve been saying it since December 2010, that Debit cards will cease to exist when the new Wall Street reform laws go into effect. On February 18th, we argued that the cost of a debit card transaction would shift from the retailer to the customer. You can view that article here: Debit Card Costs May Be Put on The Consumer – Don’t Make us Pay!.

We were right on the mark. Today JPMorgan Chase announced that debit card carrying customers would soon be subject to a purchase cap of $50 – $100 per transaction. As a result, a huge chunk of the U.S. population would no longer be able to make an average size purchae. The new video game system? Too big. A computer? Too much money. A bar tab? Better bring cash…

The reason for such a dramatic change was provoked by Debit card reform. In July 2011, the Federal Reserve will begin enforcing a maximum debit card transaction cost of 12 cents. For card issuing banks, payment networks, acquirers, and ISOs, this 12 cents is too low to be profitable, let alone sustainable. As a result, banks must make up for the loss by charging consumers.

For more information, check out the CNN article.

- The Merchant Processing Resource

http://www.merchantprocessingresource.com

Article by:
Sean Murray


Interested in assembling industry best practices and setting the stage for longevity? Join me at:





Category: Debit Cards, Merchant Processing, MPR Authored, Uncategorized

Home Merchant Cash Advance Say Goodbye to Debit Cards

You might also like:
The American Obsession With Startups

Is Google Getting Greedy?

Yield Baby Yield


STORIES FROM THE INDUSTRY TRADE JOURNAL

Wall Street Evaluates Merchant Cash Advance

Where is the talent? Recruiting in the alternative business lending industry

Square enters the merchant cash advance industry

Publisher: Merchant Processing Resource

281 words

Previously in Merchant Cash Advance:

Oct 15, 2012
Sean Murray

Is it Just us or are the Deals Getting BIGGER?

Two years ago, it was easy to say that the average Merchant Cash Advance (MCA) deal was about $20,000 to $25,000. The claim used to be, funding up to $250,000! And yet very few companies would actually go that high when it came down to it. But now? A million here, a million there… It’s [...]

Keep Reading