New Legislation Affects Debit Card Transactions

Technology // October 5, 2011

Bank of America and other large banks have plans to implement new debit card use fees. These fees are a direct result of a new law passed last summer that went into effect October 1, limiting what banks can charge vendors for each debit card use.

Recently I had the opportunity to have lunch with Bryce Collman, President of Ardent Giving Solutions. Our conversation turned to those new changes in transaction fees regarding debit card transactions that I thought important to share with my readers. Here is that conversation:

I hear Congress passed a new law that impacts debit transactions – what are the details?

Congress passed the Durbin Amendment this summer which limits how much the majority of banks can charge for processing a debit card. The pricing difference is significant and takes effect October 1.

How will that law change impact costs to your clients?

Because we offer only interchange (wholesale) pricing, our customers will benefit from these new lower costs beginning October 1.

Are all online giving providers required to pass those savings on to their church clients?

No they are not. A processor could choose to keep their pricing the same or make only minimal pricing adjustments.

What percentage of churches nationally have some form of online giving in place?

The most recent survey I am aware of indicated that 55 percent of churches with average attendance of 500 or more offer online giving, 26 percent with attendance of 200 to 499 and 9 percent of churches with under 199 attendees.

With very inexpensive solutions available, proven growth in giving, and our debit card only option, I would expect to see a significant increase in the number of small and medium size churches engaging in online giving.

What are you doing to help educate/market online giving for your clients? 

Raising a congregation’s awareness of online and recurrent giving is critical to the success of any online giving program. We provide our customers with free online giving videos and bulletin insert templates that have proven to be very effective at growing overall giving.

What results are you seeing after implementation and good marketing?

Our customers report giving growth in the 15 to 20 percent range.

Thanks to Bryce for this information. Debit transaction fees are required to not exceed a new limit on October 1 – (the change will represent a savings of over 35% from current levels) – this is great news for those of us who process debit card transactions.

If you are offering online giving in your ministry, it would be wise to ask your provider how your debit card transactions costs will be changing on October 1. If they indicate no change is planned, you may want to investigate options.

About Rusty Lewis

As a church leader, there’s nothing more frustrating than not having the funding to do what God’s calling you to do. But when you think about trying to address that problem, you feel overwhelmed, you dread the potential pushback from your congregation, and you’re not sure where to turn for help. Over the last 18 years, I’ve helped more than 120 churches close the gap between their current financial reality and what they need to move forward in ministry.

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