The National Automatic Merchandising Association (NAMA) is expecting to be hit hard by the Durbin Amendment which went into effect on October first. The new legislation caps the swipe fees that banks can collect from merchants per debit card transactions.
“Although this will be beneficial for large-ticket transactions,” said Dan Mathews, NAMA’s chief operating officer to the vendingtimes.com, “there is an adverse impact on the vending industry due to our typical small-ticket transactions. This new cap could as much as triple the net swipe fee for small transactions.” This means much higher costs for vending machine operators, a high amount of vending machine transactions are made via debit card.
Previously, banks collected an average of 44 cents in fees per debit card transaction. That fee is now capped at 21 cents per debit cards transaction. Banks will lose billions of dollars of revenue as a result and are implementing new fees upon consumers and merchants in an effort to make up the difference.
Mastercard and Visa have indicated that they intend to hike their debit card fees for small purchases to the highest amount allowable under the new law. This means instead of charging an 8 cent fee on a $2 purchase, they will charge 23 cents. The average amount of a cashless vending machine transaction is $1.67 according to one provider. Matthews said that NAMA is currently involved in negotiations with both consumer-payment networks.
“We’re looking at different options to see how we can lessen or eliminate the adverse impact of the new debit card swipe fee cap,” he told vendingtimes.com.
Additionally, Matthews said, “Our members can be sure that we’ll be taking every step possible to protect them from this heavy new burden imposed on them by this legislation. We’ll be in touch to ensure our members are up to date, but be sure to check our new link we’re developing on the NAMA website for more up-to-date information.”
NAMA points out that the impact on rates will not be felt the same throughout the industry because different operators have different gateway provider contracts.