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Overview Of Interchange Fees

Ken Tumin
Ken Tumin   |     |   5,736 posts since 2009

The interchange fees that banks get from their customers' debit card purchases are an important source of revenue for the banks and it allows banks to offer high interest on reward checking accounts. This infographic at Bill Shrink provides a good overview of interchange fees. The graphic shows $2 from a $100 purchase going to the customer's bank. For reward checking some of this money helps to pay the interest on reward checking accounts.

At the bottom of the infographic it describes the Durbin Amendment that the Federal Reserve will be putting into effect in July. Small banks should be exempt from this regulation that will cap interchange fees. However, small banks may still be affected. We'll have to wait and see how this will affect small banks and the future of reward checking.