The Durbin Amendment: what the debit fee cap means for you

The Durbin Amendment is the section of the Dodd-Frank Act that told the Federal Reserve to limit what large banks earn on debit card swipes. It added Section 920 to the Electronic Fund Transfer Act, and the Fed carried it out through Regulation II (Federal Reserve). The result, in force since October 1, 2011, is a cap: a bank with $10 billion or more in assets can receive no more than 21 cents plus 0.05% of a debit sale, plus 1 cent if it qualifies for the fraud-prevention adjustment.

For a merchant, that's the headline. The rest of this guide covers what else the law does, which cards escape the cap, what it's worth on a real month of sales, and why plenty of businesses never see the savings.

What does the Durbin Amendment actually do?

It does three separate things, and only the first is about price. The statute behind it is 15 U.S.C. 1693o-2, titled "Reasonable fees and rules for payment card transactions" (Cornell LII).

The Fed's 2011 final rule set the cap and noted that the law requires interchange to be reasonable and proportional to the cost issuers incur (Federal Reserve). The network rules apply to any issuer, not just the large ones (Federal Reserve). We cover routing in its own guide, least cost routing, so this one sticks to the fee cap and the rules around it.

How much is the Durbin debit fee cap?

The cap is 21 cents plus 0.05% of the sale, plus a 1 cent fraud-prevention adjustment for eligible issuers. In the Fed's words, a covered issuer may not receive "for any electronic debit transaction" more than that amount (Federal Reserve). The interchange part took effect on October 1, 2011 (Federal Reserve).

Because most of the cap is a fixed 21 cents, it behaves very differently across ticket sizes. Here is the maximum, with the 1 cent adjustment, at five sale amounts:

The formula is simple enough to run on any receipt: 22 cents plus half a cent for every $10 of the sale. A furniture store selling a $2,000 sofa on a big-bank debit card pays the issuer about $1.22. The same store would pay far more on almost any credit card.

Notice what the cap does not cover. It limits the interchange the issuing bank receives. Network fees and your processor's markup sit on top, and the law doesn't cap those for you.

Which banks and cards are exempt from the Durbin Amendment?

Issuers that, together with their affiliates, hold less than $10 billion in assets are exempt from the cap, so cards from smaller banks and credit unions are the ones that escape it. The Fed publishes a list of exempt institutions each year, and the current one is based on assets as of December 31, 2025 (Federal Reserve).

Exempt cards cost more on most sales, because the networks set those rates without a federal ceiling. The Fed's own data shows the gap. In 2024, debit transactions from covered issuers averaged $0.23 in interchange, exempt transactions averaged $0.51, and the two together averaged $0.34 (Federal Reserve). Those are averages across every ticket size, so treat them as a direction, not a price.

Visa's schedule shows the same thing rate by rate. An exempt debit card dipped or tapped at a retail sale costs 0.80% + $0.15, and an exempt card keyed or used online costs 1.65% + $0.15, under the schedule effective April 18, 2026 (Visa). On an $80 sale, that's $0.79 in person or $1.47 online, against a regulated maximum of $0.26.

One odd result: on very small tickets, exempt debit can be the cheaper card. At $4, the regulated maximum is $0.222, while Visa's exempt in-person rate comes to $0.182. The two meet at about $9.33. Above that, the cap wins.

You can't tell which kind of card a customer is holding. The size of the bank behind it decides, and only your statement shows the split.

What does the Durbin Amendment mean for your debit costs?

It means debit should be your cheapest card on most tickets, as long as your pricing lets it be. Here's a worked example with made-up volumes.

A grocery store in Cleveland runs 4,000 debit sales a month at a $35 average, $140,000 in total, all dipped or tapped. Say 70% are regulated cards and 30% exempt.

• Regulated: 2,800 sales at the $0.2375 cap is $665.00.
• Exempt: 1,200 sales at 0.80% + $0.15 ($0.43 each) is $516.00.
• Total debit interchange: $1,181.00, or 0.84% of debit sales.

What is the cap worth here? If those 2,800 regulated sales carried the exempt rate instead, they'd cost $1,204.00. The cap saves this store $539.00 a month in interchange, before anyone negotiates anything.

Now the part that decides whether the store keeps that money. On a made-up interchange-plus quote of 0.20% + $0.07 a sale, the markup adds $280.00 plus $280.00, so debit costs $1,741.00 before network fees, about 1.24%. On a made-up flat rate of 2.75%, the same debit sales cost $3,850.00. That's $2,109.00 more a month. A little of that gap would go to network fees, which the interchange-plus figure leaves out. The rest is processor margin.

Here's the catch for small businesses: the law cut what large issuers receive, but it says nothing about what your processor charges you. If your plan bills debit at a credit card rate, the savings stop at the processor. Our interchange-plus vs flat rate guide runs the comparison at other ticket sizes, and our pricing page explains how we pass interchange through at cost.

Does the Durbin Amendment apply to credit cards?

No. The fee cap covers electronic debit transactions only, so credit card interchange is still set by the networks. The law does touch credit cards in two narrow ways, both about what card networks may not stop you from doing (Cornell LII):

1. You may set a minimum purchase for credit cards, as long as it is no more than $10 and doesn't differ by card issuer or network. The Fed has the power to raise that figure by regulation. The rule says nothing about debit, so a minimum on debit isn't protected by it.
2. Federal agencies and colleges and universities may set a maximum for credit card payments, again without favoring an issuer or network.

The discount rule covers every payment type. Networks can't stop you from offering a discount for paying by cash, check, debit card, or credit card, provided the discount doesn't vary by issuer or network (GovInfo). That's the legal footing for a cash discount program.

Surcharges are a different matter, and the Durbin Amendment doesn't authorize them. Visa caps US credit card surcharges at the lesser of your merchant discount rate or 3% and requires 30 days' notice to your acquirer (Visa). Mastercard caps them at the lesser of your average effective merchant discount rate or 4% (Mastercard). Neither network allows surcharges on debit or prepaid cards, so a Visa or Mastercard debit card can't carry one. Our guide to the debit card surcharge explains the details, and our surcharging program handles credit card surcharges where your state allows them.

Is the Durbin debit cap going to change?

Possibly, but not yet. In October 2023, the Fed proposed lowering the cap: the base would fall from 21.0 cents to 14.4 cents, the percentage from 5.0 to 4.0 basis points, and the fraud-prevention adjustment would rise from 1.0 to 1.3 cents (Federal Reserve). On an average $50 sale, the cap would drop from 24.5 cents to 17.7 cents. The proposal would also update the cap every other year based on cost data from large issuers.

Comments on the proposal, docket R-1818, were due May 12, 2024 (Federal Reserve). As of October 2026, the Fed's Regulation II page still lists the standard of 21 cents plus 0.05% plus the 1 cent adjustment, and we found no final rule. Check that page before you budget around a new number.

What would the proposal be worth? For our Cleveland grocer, the cap on a $35 sale would fall from $0.2375 to $0.171, a drop of 6.65 cents. Across 2,800 regulated sales, that's $186.20 a month. On interchange-plus, it would show up on the statement without a phone call. On a flat rate, it would show up only if the processor chose to lower the rate.

Common misunderstandings about the Durbin Amendment

Most of the confusion comes from mixing up the issuer's fee with the merchant's bill.

• "My debit fees are capped." Only the issuer's interchange is capped. Network fees and markup aren't.
• "Every debit card is regulated." Cards from issuers under $10 billion in assets are exempt and usually cost more.
• "PIN debit is capped and signature debit isn't." The cap applies to any electronic debit transaction from a covered issuer, PIN or not.
• "The cap is the same percentage on every sale." It's mostly a fixed fee, so it's 1.88% of a $12 sale and 0.06% of a $2,000 one.
• "Durbin lets me add a debit fee." It doesn't, and Visa and Mastercard forbid debit surcharges.
• "It lowered credit card fees too." Credit card interchange isn't covered.

How to make sure the Durbin savings reach you

Your statement holds the answer. On interchange-plus pricing, regulated and exempt debit show up as separate interchange lines, so you can check them in a few minutes.

1. Find your regulated debit lines and divide the interchange by the number of sales. Compare the result with the cap for your average ticket. At $35, anything well above 24 cents a sale needs an explanation.
2. Look at the share of your debit volume on exempt cards. If it's large, routing matters more for you, and our least cost routing guide explains why.
3. Check how debit is priced. If one rate covers every card, you're paying credit card prices on a capped product.
4. Watch the per-sale fee. On a $12 average ticket, 10 cents a sale is 0.83% of sales by itself.
5. Use discounts, not debit fees, if you want to steer customers toward cheaper payments.

Our guides to debit card processing fees and reading a merchant statement show where these lines usually sit. Because Regulation II is federal, the same cap and the same exemptions apply to merchants anywhere in the United States, whether you run a café in Tucson or a hardware store in Ohio.

Your next step

If you want to know what the Durbin Amendment is doing for your business, send us a recent statement for a free statement review. We'll pull out your regulated and exempt debit lines, check them against the cap, and show what the same month would cost on interchange-plus. Our page on credit card processing fees explains the other layers, or you can contact us with a question first.