Regulated Debit Cards are debit cards issued by banks with assets of $10 billion or more. Under the Durbin Amendment, interchange fees for these debit cards are capped at 21 cents plus 0.05% of the transaction amount.
This regulation was implemented to curb the high interchange fees that merchants were required to pay for debit card transactions, which were often passed on to consumers in the form of higher prices. The cap on interchange fees applies only to regulated debit cards, and not to credit cards or debit cards issued by smaller banks.
While this regulation has helped to reduce costs for merchants — and, indirectly, for consumers — it has also led to some unintended consequences. Some banks have responded by increasing other fees or reducing rewards for debit card users.
Additionally, there has been debate about whether the cost savings for merchants have been fully passed on to consumers, or whether merchants have retained some of the savings as increased profits.