SOURCE: Heartland Payment Systems

Heartland Payment Systems

March 06, 2012 09:48 ET

Heartland Payment Systems® Delivers More Than $100 Million in Durbin Debit Reform Savings to Merchants

Heartland's Interchange Fee Reductions Pass-Through Model Gives Merchants Financial Boost

PRINCETON, NJ--(Marketwire - Mar 6, 2012) - As one of the nation's largest payments processors, Heartland Payment Systems (NYSE: HPY) has delivered more than $100 million of signature debit savings to business owners throughout the United States since the implementation of the Durbin Amendment swipe fee reform on October 1, 2011.

The Durbin Amendment, part of the Dodd-Frank Wall Street Reform Act, was enacted to provide business owners financial relief from card processing costs as many proprietors struggle to keep their doors open during the economic downturn. The legislation caps debit card interchange rates for issuing banks with more than $10 billion in assets at 21 cents per transaction, plus one cent for issuers with an effective fraud prevention system, and 0.05 percent of the volume of transaction -- a significant reduction from the average of 44 cents that merchants paid per debit card purchase before the Durbin Amendment.

"This $100 million Durbin Dollars savings milestone, in only five months, showcases the magnitude of the reform's effects on the merchant marketplace and on business owners at large," said Bob Carr, Heartland's chairman and CEO. "While several payment processors are lining their own pockets with the savings at the expense of their customers, Heartland is passing the Durbin interchange reductions to its merchants. As these figures show, those pennies add up very quickly. These are tangible savings that are impacting business owners that do business with our company."

With the extra cash, merchants have additional financial resources to improve their business operations and customer service by investing in new equipment and technologies, hiring additional staff, re-evaluating pricing, diversifying product offerings and much more. Lower debit card processing costs also encourage merchants that don't accept cards to start offering the convenience to customers.

Heartland expects its average merchant to save approximately $1,000 annually per location. To ensure that its merchants know exactly how much they are saving, Heartland highlights its Durbin Dollars on its monthly processing statements.

Looking at it nationally, here is an estimate of total savings distributed by state:

State Total Estimated Visa/MasterCard Signature Debit Savings From October 1, 2011 - March 1, 2012
Alabama $1,235,294.77
Alaska $171,025.12
Arizona $1,639,008.91
Arkansas $942,886.04
California $13,558,942.69
Colorado $3,660,865.36
Connecticut $1,524,948.99
Delaware $389,988.30
Florida $6,374,862.98
Georgia $2,415,836.43
Hawaii $1,151,981.82
Idaho $511,061.13
Illinois $3,073,700.27
Indiana $1,876,165.45
Iowa $729,467.89
Kansas $873,111.61
Kentucky $1,136,004.56
Louisiana $1,394,846.09
Maine $323,662.40
Maryland $2,086,143.01
Massachusetts $2,354,402.64
Michigan $2,490,077.51
Minnesota $2,386,425.66
Mississippi $608,855.71
Missouri $2,861,590.82
Montana $368,749.23
Nebraska $651,121.06
Nevada $923,729.13
New Hampshire $839,620.50
New Jersey $3,611,133.20
New Mexico $704,603.53
New York $5,288,207.18
North Carolina $3,781,426.65
North Dakota $395,597.12
Ohio $5,135,478.41
Oklahoma $1,810,561.15
Oregon $863,842.03
Pennsylvania $3,056,703.59
Rhode Island $277,562.99
South Carolina $1,298,993.84
South Dakota $159,441.95
Tennessee $1,357,975.47
Texas $5,934,466.82
Utah $837,918.41
Vermont $205,124.02
Virginia $3,400,630.92
Washington $2,254,438.03
Washington DC $222,671.24
West Virginia $156,544.78
Wisconsin $956,801.19
Wyoming $131,286.06

Heartland also found:

  • 62 percent of its signature debit sales volume qualified as regulated
  • 64 percent of its PIN debit volume qualified as regulated
  • On average, there is a savings of $0.20 per transaction for regulated (vs. non-regulated)
    • The average signature debit non-regulated interchange fee per transaction is $0.43
    • The average signature debit regulated interchange fee per transaction is $0.23
  • On average, there is a savings of 73 basis points for regulated (vs. non-regulated)
    • The average signature debit non-regulated effective rate is 1.54 percent
    • The average signature debit regulated effective rate is 0.81 percent

About Heartland Payment Systems
Heartland Payment Systems, Inc. (NYSE: HPY), the fifth largest payments processor in the United States, delivers credit/debit/prepaid card processing, gift marketing and loyalty programs, payroll and related business solutions to more than 250,000 business locations nationwide. A FORTUNE 1000 company, Heartland is the founding supporter of The Merchant Bill of Rights, a public advocacy initiative that educates merchants about fair credit and debit card processing practices. The company is also a leader in the development of end-to-end encryption technology designed to protect cardholder data, rendering it useless to cybercriminals. For more detailed information, visit HeartlandPaymentSystems.com or follow the company on Twitter @HeartlandHPY and Facebook at facebook.com/HeartlandHPY.

Forward-looking Statements
This press release contains statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including risks and additional factors that are described in the Company's Securities and Exchange Commission filings, including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2011. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.

Contact Information

  • Media Contacts:
    Michael J. LaCosta
    Director of Public Relations
    Heartland Payment Systems
    1-888-798-3131, ex. 2245
    Email Contact

    Leanne Scott Brown
    Vault Communications
    610-455-2742
    Email Contact