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FTC Probing Visa, Mastercard About Debit Card Practices

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The Federal Trade Commission (FTC) is talking to large merchants to discover if some retailers are being blocked from routing digital payments over alternative debit networks, sources told Bloomberg. A 2010 law known as the Durbin amendment — named for Illinois Democrat Sen.

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Visa Adjusts Policies On Debit Routing

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The company said that, with the chip cards, routing and processing of debit transactions are made possible across two payment application identifiers (AID) that are contained on the chip. Common Debit AID and the Visa Debit AID. Debit option allows for more secure transactions while charging merchants less than the Visa network.

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A Debit-Enabled Fix To In-Store Checkout Abandonment

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Debit cardholders often choose this payment method because it is more secure than carrying cash — which cannot be recovered if lost — and may safeguard them against spending more than they have, which is not the case with credit cards. Deep Dive: How Card Networks Must Compete For Merchants’ Debit Routing.

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A Critical Look At Debit Routing

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Card networks attract merchants with promises of faster, more accurate debit routing, and merchants pay handsomely to transact across these networks. The Durbin Amendment is a 2010 law that gives merchants some choice in which networks route their debit payments, so networks want to entice retailers with speed and convenience.

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Deep Dive: How Payment Card Networks Win Merchants Over

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Merchants pay payment processing fees and banks pay for permission to issue cards stamped with providers’ brands, but the network over which payments are ultimately sent lies with individual merchants. Consumers’ funds are then sent to PIN debit network operators, which extract interchange fees and pass the rest to merchants’ banks.