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DEBITMAN : avoiding interchange commissions
04/10/2006
Innovation
DEBITMAN is a charge card and loyalty card with 3 parties (the holder, the retailer and
the retailer’s bank). The retailer avoids the interchange commission by debiting
directly the cardholder’s account. The retailer’s costs seem to be lower: $0.15
for a basket of $60, i.e. 0.25% (but the card management costs and those relating
to the risks of unpaid items and cardholder debit are not counted). Cardholders
benefit from access to a network of participating retailers and loyalty points.
HSBC USA is behind this project. Its success can probably be explained by the very high
level of interchange fees in the USA.
How would this apply to you ? « Back to previous pagePerspective
This North American initiative could be used as a benchmark for European initiatives in the Sepa payment cards framework. The American initiative is driven by the determination of retailers to compete with banks in the area of means of payment and reduce costs for consumers (a subject which is also a hobbyhorse of the Commission). Wall-Mart and other retailers have therefore joined forces to create a new acceptance network with a common brand and lower financial charges. The same reasoning could lead to the emergence of a similar Sepa cooperation initiative concerning charge cards in Europe.
