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smartphones. NFC functionality changed materially" since the caps took hold in late 2011, the Fed said.
also has been built into new EMV- • Card-not-present (CNP) transactions accounted for 14.5 percent of all
compliant terminals.
debit and GPR prepaid card usage in 2015.
Merchants, however, seem unaware • The average CNP transaction in 2015 was $70.76, which was more than
their new terminals support NFC ac-
ceptance. "I don't think NFC has been twice the average card-present transaction.
explained to many merchants," Alex- • Fraud losses from debit card payments totaled $2.41 billion in 2015, a 44
is King, Director of Partner Relations
at National Merchants Association, percent increase over 2013.
said during a recent interview. Tak- Patti Murphy is Senior Editor of The Green Sheet and President of ProScribes Inc. She is also the
ing the time to explain this could founder of InsideMicrofinance.com. Email her at patti@greensheet.com.
make EMV more palatable.
27
Debit update

In related news, a new Fed report
revealed that issuer costs are down
and fraud is up. The Durbin Amend-
ment requires the Fed to implement
and monitor the impact of debit card
interchange caps. A report issued on
Nov. 30 – 2015 Interchange Fee Rev-
enue, Covered Issuer Costs, and Cov-
ered Issuer and Merchant Fraud Losses
Related to Debit Card Transactions
– is the fourth Fed report issued on
debit cards since capping debit inter-
change. That cap is 21 cents plus five
basis points on the transaction total.
Issuers that meet certain fraud pre-
vention standards can add a penny
to the charge. Small issuers (those
with consolidated assets under $10
million) are exempt from the caps, as
are government-administered pay-
ment programs and certain reload-
able prepaid cards.

The Fed surveyed debit card net-
works as well as issuers for the re-
port, collecting pricing and cost data
from 2015. These are some of the met-
rics revealed:

• Payment card networks pro-
cessed 60.6 billion debit and
general-purpose reloadable
(GPR) prepaid debit card trans-
actions valued at $2.31 trillion
in the United States during
2015. Volume was up 6.8 per-
cent over 2013.

• Interchange fees across all deb-
it and GPR cards (covered and
exempt cards) totaled $18.41
billion in 2015.

• The average interchange fee
for covered transactions was
23 cents in 2015 and "has not