NEWS on Payments

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Fed proposes changes to interchange regs

May 10, 2021

The Federal Reserve Board invited public comment on proposed changes to Regulation II (Debit Card Interchange Fees and Routing).

Details: The changes would clarify that debit card issuers should enable, and allow merchants to choose from, at least two unaffiliated networks for card-not-present debit card transactions, such as online purchases.

Background: The Fed said two unaffiliated networks are often not available to process card-not-present debit card transactions because some issuers do not enable them, which prevents merchants from having a choice between competing networks when routing such transactions.

Report: The Fed also issued its latest biennial interchange report, which found that U.S. payment card networks in 2019 processed 79.2 billion debit and general-use prepaid card transactions valued at $3.1 trillion. Total transaction volume grew 7 percent in 2019, in line with the 7.8 percent average annual growth rate from 2009 to 2018.

Next: Comments are due 60 days after publication in the Federal Register.