Debit interchange transaction fee survey revisions proposed by Fed

(Updated Aug. 12, 2019)

An interchange transaction fee survey that is completed annually by debit card issuers and payment card networks and submitted to the Federal Reserve would be renewed for three years with revisions under a notice for comment issued for a 60-day comment period that ends Oct. 11.

The notice, published Monday in the Federal Register, points out that completing the survey (conducted via FR 3064a and FR 3064b) is mandatory under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). In all, the Fed estimates that 541 debit card issuers and 15 payment card networks respond to the annual survey.

Dodd-Frank requires the Fed Board to disclose, at least every two years, aggregate or summary information the Fed deems appropriate “or in the public interest” concerning the costs incurred for, and interchange transaction fees received by, issuers with respect to debit card transactions. The survey data is used to fulfill that disclosure requirement. The Fed also uses data from the payment card network survey to publicly report on an annual basis the extent to which networks have established separate interchange fees for exempt and covered issuers. The Fed also uses survey data in deciding whether to propose revisions to the interchange fee standards in its regulation on debit card interchange fees and routing (Regulation II).

Proposed changes for the debit card issuer survey, FR 3064a, include:

  • remove breakout of interchange fees reimbursed to acquirers as a result of chargebacks or returns;
  • add tokenization as an option for fraud prevention;
  • add language in the survey instructions to address the situation where a debit card issuer has become newly covered by the interchange fee standards in the year that the survey is being conducted, after not having been covered in the previous year;
  • update definitions in the glossary of terms to provide more clarity.

The Fed is proposing the following changes for the payment card network survey, FR 3064b:

  • remove question about number of merchant establishments (Section I, Question 5);
  • remove question about offering an interchange fee schedule that differentiates between exempt and non-exempt issuers (Section I, Question 6);
  • remove questions about refunds of interchange fees to acquirers for chargebacks and returns (Section II, Question 2b, 2b.1, 2b.2, 2c, 2c.1, 2c.2, 2d, 2d.1, 2d.2, 2e, 2e.1, and 2e.2);
  • add language in the instructions to clarify reporting expectations for entities that own multiple networks;
  • update definitions in the survey glossary to provide more clarity.

Proposed Agency Information Collection Activities; Comment Request

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