Post Durbin, More Merchants Shopping for Alternative Payment Options

COCONUT CREEK, Fla. -- If their level of shopping for lower-cost payment alternatives is any indication, merchants who thought they won at least a partial victory in reforming debit card interchange pricing through legislative actions have not gotten what they hoped for, according to National Payment Card Association (NPCA), an issuer and processor of merchant-branded, PIN-based debit cards.

The company reported that it's seeing a large uptick in interest from merchants who are researching payment options that can help them reduce payment costs and at the same time, create sustained customer loyalty.

"The retailers we are speaking with are being given direction from their senior leaders to research the markets for any and all options," said NPCA CEO Joe Randazza. "Merchants want customer loyalty and they want cost reduction in payments as well; plus they don't want to have to make major investments in order to achieve those goals. It is clear that actions by Congress and follow up actions by banks are moving merchants to look around en masse."

With large banks undertaking efforts to move consumer behavior away from debit, retailers are anticipating that the use of debit cards will decline and they will begin seeing a higher proportion of card usage among products that give banks higher interchange rates. Merchants are seeking ways to change that course in order to keep payment costs down, NPCA noted.