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Thursday, September 18, 2014

Fed Publishes Interchange Report

The Federal Reserve Board published a report on the volume and value, interchange fee revenue, certain issuer costs and fraud losses related to debit card transactions in 2013. The report is the third in a series to be published every two years pursuant to section 920 of the Electronic Fund Transfer Act (EFTA).

In 2013, covered issuers' costs of authorizing, clearing, and settling (ACS) debit card transactions, excluding issuer fraud losses, varied greatly across respondents, with the median issuer having an average ACS cost of 14.9 cents and the issuer at the 75th percentile having an average ACS cost of 42.2 cents.

Issuers with the highest debit card transaction volume generally had the lowest ACS costs per transaction as reflected in an overall average of 4.4 cents per transaction, down from 5 cents per transaction in 2011. Conversely, issuers with the smallest debit card programs generally had the highest ACS costs per transaction.

The estimated debit-card fraud losses to all parties was $1.57 billion in 2013, with an average loss of approximately 8 basis points as a share of transaction value, up slightly from 2011.

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