Debit interchange fees are collected by the card issuers and paid by the merchants for every debit card transaction. The Federal Reserve limited these fees to 0.05% of the purchase amount plus $0.22 per transaction. The new limit will reduce the average interchange fee amount from $0.44 to $0.24 per debit transaction.
However, there are significant differences in the way the new limit affects the two types of debit transactions: PIN-based and signature-based. While the interchange fees merchants pay for accepting the latter type decrease substantially, the fees for accepting the former type increase slightly.
Here are some debit interchange statistics and calculations that illustrate the effects of the Fed’s rule: