SETTING THE RECORD STRAIGHT: New Analysis Demonstrates the Durbin Amendment Has Not Led to Consumer Savings or Employment Gains, Contrary to Retailer Claims

The Electronic Payments Coalition (EPC) released a new analysis today that directly dispels inaccurate claims in a report frequently cited by merchant and retailer groups on the effects of the Durbin Amendment.

Retailer claims that the Durbin Amendment has benefitted consumers and supported employment gains are based on a flawed study that relies on faulty assumptions. Independent data from the Federal Reserve verifies that merchants are the sole beneficiaries of interchange price caps, at the expense of both consumers and the financial industry.

“Merchant groups have been touting a study they funded in 2013 by economist Robert J. Shapiro to back up their positions on interchange regulation,” said Molly Wilkinson, executive director of EPC. “The study is fundamentally flawed and presents an inaccurate picture of the true impact of the Durbin Amendment. This is a failed policy that only benefits the special interests that pushed for it—big box retailers.”

The cornerstone of pro-Durbin arguments was that large merchant groups (the Amendment’s most vocal supporters) would pass along the roughly $8 billion in annual interchange fee savings to consumers in the form of lower prices and added payrolls.

Despite strong evidence to the contrary, retailers continue to argue that consumers are benefitting from the Durbin Amendment through lower prices and the creation of tens of thousands of jobs per year.

EPC’s research debunks the claims of the Shapiro white paper and provides a factual assessment of price controls on debit card transactions. The research elaborates on:

• The fact that the merchants rely on a single, industry-affiliated study to support their claims regarding consumer benefits and job creation
• An inaccurate assumption of merchants passing savings on to consumers
• Data that ignores the true net effect of the Durbin Amendment

Read the full EPC analysis here and learn more about the Durbin Amendment here.

The Electronic Payments Coalition (EPC) is a coalition of payments industry stakeholders, such as credit unions, community banks, trade associations, payment card networks and banks that speaks on behalf of the payments industry to protect the value, innovation, convenience, security and competition that exists in the modern electronic payments system. The EPC educates policymakers, consumers and the media on the system’s role in economic growth and the importance of consumer choice, security, innovation and stability for the continued growth of global commerce.

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