Colloquy

Which debit rewards will reign after financial reform?

07/23/2010

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Seen and noted: An article from bankrate.com (seen on Payments Source) states: "Mirroring what previously was known about debit card rewards, consumer website Bankrate.com has found through its own recent research that the majority of programs require a signature-based transaction to receive an incentive. How that changes after the Federal Reserve Board sets debit card interchange rates remains to be seen, and the survey data could serve as a benchmark, Bankrate.com says."

According to the article: "Bankrate.com in June examined 40 debit card rewards programs and found that 65% gave rewards only on signature purchases, while 30% did so for both signature and PIN-debit transactions. The other 5% of programs only offered merchant-funded rewards. Debit card rewards are in store for a major overhaul now that Congress has passed the financial reform bill, observers predict. The legislation includes an interchange amendment that requires the Fed to set debit card rates that are "reasonable and proportional" to the cost of processing the transactions."

For more COLLOQUY POV on the new financial regulations just signed into law, read Kelly Hlavinka’s blog postings here and here.

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