The Durbin Amendment is a federal law that limits the interchange fees large banks can collect on debit card transactions, which lowers one of the costs merchants pay to accept those cards. It applies only to certain debit cards, mainly those issued by banks and credit unions with $10 billion or more in assets. It also caps only the issuer’s interchange fee. Network fees, processor markups, and other charges on a merchant’s statement fall outside the cap.

How Does the Durbin Amendment Affect Debit Card Fees?

The Durbin Amendment sets a ceiling on the interchange fee a large issuer can receive each time one of its debit cards is used. Congress passed it in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Federal Reserve carries it out through Regulation II, which took effect in October 2011.

Interchange is the fee the cardholder’s bank collects on every card transaction. Merchants don’t pay it to the bank directly. It’s passed through as part of the processing fees charged by their payment processor. Along with the fee cap, the law gives merchants more choice in which network carries each debit transaction, covered in more detail below.

Why the Durbin Amendment Matters for Merchants

Interchange is typically the largest part of what a business pays to process a card, so capping it on covered debit transactions cut one of the biggest costs on a processing statement. According to Federal Reserve data, the average debit interchange fee was about 43 cents per transaction before the cap took effect. Within a few months, the average on covered transactions had dropped to 24 cents.

What that change means for a specific business depends on how its processor bills. On some statements, interchange appears as its own line item for each card type. On others, it’s rolled into a single rate, and a lower interchange cost may not show up as a lower charge. Knowing which kind of statement you have is the first step in seeing whether the cap is working in your favor.

Which Debit Cards Are Covered?

Coverage depends mainly on the size of the bank or credit union that issued the card. A few card types are also exempt regardless of who issued them.

• Cards from large issuers: The interchange cap applies when the issuer, together with its affiliates, has $10 billion or more in assets. This includes most cards from national and large regional banks.
• Cards from smaller issuers: Community banks and credit unions below the $10 billion threshold are exempt from the cap, so interchange on their cards is often higher.
• Certain prepaid and government-benefit cards: Some reloadable general-use prepaid cards and cards issued through government-administered payment programs are also exempt from the cap, even when a large bank issues them.

The debit network-routing rules still apply to small issuers, even though their cards are exempt from the interchange cap.

How Much Is the Durbin Debit Interchange Cap?

The current cap is 21 cents plus 0.05% of the transaction amount, with an extra 1 cent allowed for issuers that meet the Federal Reserve’s fraud-prevention standards. On a $50 purchase, that works out to a maximum of 23.5 cents, or 24.5 cents with the fraud-prevention adjustment. This is the most the issuer can collect in interchange. The merchant’s total cost for the transaction also includes network fees and the processor’s markup.

Does the Cap Apply to PIN, Signature, and Online Debit?

Yes. The cap applies to covered debit transactions however the customer pays, whether they enter a PIN, sign, tap to pay, or check out online or over the phone. What decides coverage is who issued the card, not how it was presented.

A separate routing rule gives merchants more control over how those transactions are processed. Every debit card must be enabled on at least two unaffiliated networks, so a transaction doesn’t have to run over the network tied to the card’s brand. A Federal Reserve rule that took effect in July 2023 made clear this requirement covers card-not-present transactions too, so online and phone payments must have at least two routing options as well. For more on how each transaction type is processed, see Beacon Payments’ guide to debit card processing.

Other Merchant Rules Under the Durbin Amendment

Beyond debit fees, the Durbin Amendment lets merchants set credit card minimums and reward customers for choosing lower-cost payment methods.

• Credit card minimums: Merchants can require a minimum purchase of up to $10 for credit card transactions, as long as the minimum applies equally to all card issuers and networks. The minimum can’t be applied to debit cards.
• Discounts for other payment methods: Merchants can offer a discount to customers who pay with cash, check, debit, or another form of payment.

Where the Durbin Amendment Stands

Last updated: September 30, 2026

The current debit interchange cap remains in effect. In August 2025, a federal district court in North Dakota ruled in Corner Post, Inc. v. Board of Governors of the Federal Reserve System that Regulation II’s fee standard went beyond what the Durbin Amendment allows, and it vacated the rule. The court stayed its own ruling while the Federal Reserve appeals, so the 21-cent cap still applies. The U.S. Court of Appeals for the Eighth Circuit heard oral arguments in May 2026 and had not issued a decision as of this update.

Separately, the Federal Reserve has proposed lowering the base component of the cap from 21 cents to 14.4 cents. That proposal hasn’t been finalized and is not the current rate. For now, the practical step is to review your processing statement against today’s rules rather than plan around a rate change that may or may not happen.

Does the Durbin Amendment Lower Your Debit Processing Costs?

It can, but only if your pricing model passes the lower interchange through to you. With interchange-plus pricing, the processor charges the actual interchange on each transaction plus a set markup, so the lower cost of regulated debit is typically visible on your statement. With flat-rate pricing, you pay the same percentage on nearly every card, so the lower interchange on a regulated debit transaction may not change what you’re charged.

To see where you stand, find out which pricing model your processor uses, then compare what you pay on debit transactions with what you pay on credit. If the two look about the same, it’s worth asking why.

Lower Your Debit Processing Costs With Beacon Payments

If debit cards make up a big share of your sales, the way you’re priced has a direct effect on what you keep. Beacon Payments works with small and mid-sized business owners to set up card processing that fits how their customers pay. Talk with the Beacon Payments team about your debit processing costs.