Regulation II: Debit Interchange Caps (Durbin) Explained

What Regulation II does

The Federal Reserve Board says Regulation II establishes standards for assessing whether a debit card interchange fee received by an issuer is reasonable and proportional to the issuer's costs, allows a fraud-prevention adjustment for issuers that meet fraud-prevention standards, and prohibits issuers and networks from restricting the number of networks for debit transactions to fewer than two unaffiliated networks or inhibiting a merchant's ability to direct routing. It is often called the Durbin rule. Interchange is paid to the card-issuing bank, so the cap affects what your processor pays on regulated debit, not the markup your processor adds. This page is general information about a federal rule as of September 16, 2026, not legal advice.

The cap on regulated debit

The Federal Reserve's compliance guide says that for covered issuers the interchange fee may not exceed 21 cents plus a variable factor of 5 basis points multiplied by the value of the transaction. An issuer that meets the fraud-prevention standards may receive an additional 1 cent per transaction. Visa's US interchange schedule effective April 18, 2026 lists regulated debit and prepaid rows at 0.05% + $0.21, with an additional $0.01 for issuers that certify compliance with the fraud-prevention standards.

Who is exempt

The cap does not apply to every debit card. According to the Federal Reserve's compliance guide, issuers with total assets of less than $10 billion (measured at the end of the year before the transaction) are exempt from the fee standards. The Board also lists exemptions for certain government-administered payment programs and certain reloadable general-use prepaid cards. Exempt cards can carry much higher interchange. In Visa's April 2026 schedule, for example, exempt CPS/Retail debit is 0.80% + $0.15 and exempt CPS/Card Not Present debit is 1.65% + $0.15, against 0.05% + $0.21 for regulated cards. The network exclusivity and routing rules apply to all issuers, including exempt ones.

What merchants actually pay on debit

The Federal Reserve publishes average debit interchange fees from issuer and network reports. For 2024, its data page (last updated December 19, 2025) shows an average of $0.23 per transaction for covered (regulated) transactions and $0.51 for exempt transactions. By network type, dual-message (signature) networks averaged $0.37 and single-message (PIN) networks $0.25. These are averages across all merchants and ticket sizes, not a rate you will see on any one sale. Your own debit cost depends on how many of your customers carry cards from small banks and credit unions, your ticket size and how your debit is routed.

Your routing rights

The compliance guide says every issuer must enable at least two unaffiliated payment card networks to process debit transactions, and issuers and networks may not inhibit a merchant's ability to direct the routing of a debit transaction over any network the issuer has enabled. The Board applied the network exclusivity prohibition to card-not-present transactions, effective July 1, 2023. For merchants, this means online and in-app debit sales should also have a second network available. Whether you benefit depends on your processor: ask whether they route debit to the lower-cost enabled network, and whether any routing savings reach you or stay with them.

Proposed changes

On October 25, 2023 the Board announced a proposal to lower the interchange fee cap and to update it every other year based on issuer cost data. The Board's example was that the cap on an average-sized $50 debit transaction would fall from 24.5 cents under the current rule to 17.7 cents under the proposal. A proposal is not a final rule. The cap described above is the one in the Board's published compliance guide; check the Federal Reserve's Regulation II pages for current rules before relying on either number.

What to check on your statement

1. Ask for interchange detail that separates regulated debit, exempt debit and credit. 2. On regulated debit, interchange should follow the 0.05% + $0.21 (+$0.01) formula; the rest of the line is your provider's markup and fees. 3. On flat-rate pricing, debit and credit usually cost the same percentage, even though regulated debit interchange is far lower, so debit-heavy, larger-ticket businesses often lose the most on flat rate. 4. Ask how debit is routed, including online. 5. Remember that card network rules bar surcharging debit cards, whatever the interchange.