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Bob Carr speaks frankly about what the Durbin Amendment means for the restaurant industry. Where Meets Your Following is an excerpt from a speech given by Heartland Payment Systems CEO Bob Carr at the NRA Public Affairs Conference, held on April 13, 2011. The objective of the speech was to offer clarity and understanding on the topic of interchange in the restaurant industry. This is in light of recent controversy surrounding the Durbin Amendment, passed as part of the Dodd-Frank Act on July 15, 2010. “Heartland is pleased to be a strong partner of the National Restaurant Association… I want to make sure that you understand the significance of [the Durbin Amendment] for each of us and for our industry as a whole. Heartland processes more than $100 billion of Visa/MasterCard transactions — 4.2 billion transactions each year — 11 million tabs each and every day. Debit transactions make up 70% of this 4.2 billion and 58% of the $100 billion dollars. The Durbin Amendment will save our customers a total of $450 million dollars in its first year. Our average restaurant customer will save $1,992 dollars per year. This is more than our average processing fees — all in — to our restaurant customers. We will collect $450 million less after Durbin than we are collecting now from our customers and we love it. That $450 million is your money, not ours. I wish every provider felt the same way, but they don’t. Some providers will keep part of the savings for their profitability and will not pass 100% of the savings through to you, the customer. The National Restaurant Association Advocacy team has focused on this issue — and seized upon an opportunity to really affect change in your bottom line. When margins are as tight as they are in the restaurant business, every percentage point saved is real money for you to create jobs and better serve your customers. Despite increased debit card volume and improved technology efficiency, you have seen costs of accepting cards go up. This is primarily because the number of transactions has increased. But your rates should be coming down and they are not.

Bob Carr - Durbin

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Page 1: Bob Carr - Durbin

Bob Carr speaks frankly about what the Durbin Amendment means for the restaurant industry.

WhereMeets Your

Following is an excerpt from a speech given by Heartland Payment Systems CEO Bob Carr at the NRA Public Affairs Conference, held on April 13, 2011.

The objective of the speech was to offer clarity and understanding on the topic of interchange in the restaurant industry. This is in light of recent controversy surrounding the Durbin Amendment, passed as part of the Dodd-Frank Act on July 15, 2010.

“Heartland is pleased to be a strong partner of the National Restaurant Association… I want to make sure that you understand the significance of [the Durbin Amendment] for each of us and for our industry as a whole.

Heartland processes more than $100 billion of Visa/MasterCard transactions — 4.2 billion transactions each year — 11 million tabs each and every day. Debit transactions make up 70% of this 4.2 billion and 58% of the $100 billion dollars.

The Durbin Amendment will save our customers a total of $450 million dollars in its first year. Our average restaurant customer will save $1,992 dollars per year. This is more than our average processing fees — all in — to our restaurant customers.

We will collect $450 million less after Durbin than we are collecting now from our customers and we love it. That $450 million is your money, not ours. I wish every provider felt the same way, but they don’t. Some providers will keep part of the savings for their profitability and will not pass 100% of the savings through to you, the customer.

The National Restaurant Association Advocacy team has focused on this issue — and seized upon an opportunity to really affect change in your bottom line. When margins are as tight as they are in the restaurant business, every percentage point saved is real money for you to create jobs and better serve your customers.

Despite increased debit card volume and improved technology efficiency, you have seen costs of accepting cards go up. This is primarily because the number of transactions has increased. But your rates should be coming down and they are not.

Page 2: Bob Carr - Durbin

The large operators and smarter small operators are on true interchange pass-through pricing with their providers. These restaurants have set pricing from their providers, and their rates for the processing services do not go up during the term of the contract.

All restaurants processing on the NRA-endorsed Heartland program — that 44 state restaurant associations have also endorsed — are in this group. Most other small- and mid-sized restaurants are not. They are the ones getting ripped off the most because they are victims of high interchange as well as complex pricing that even PhD’s cannot understand. This deliberately manufactured complexity allows their providers to reach into their bank accounts for one junk fee after another, month after month, with impunity.

Many small- and mid-size restaurants receive continual price increases that are falsely blamed on Visa and MasterCard. These fee increases come every spring at about this time. Here is an important fact: there were no rate or fee increases this spring for restaurants from Visa and MasterCard — yet over 85% of America’s restaurants received another fee increase letter in the past few weeks or months.

I have copies of them if you would like to see them. Restaurants should use the rate calculator on the NRA website to see how much their increased fees will be causing them to overpay providers that are earning operating margins you would die to have on your income statement!

This is a major expense to your business, and many restaurateurs do not even open or look at their processing statements when they come in the mail. If you don’t look at yours because it is too complicated to understand, I promise you that you are overpaying!

Providers in America are licking their chops waiting for the Durbin Amendment to pass, while most smart merchants are working very hard to keep it in place for a July 21 launch. There are billions of dollars at stake here, my friends. One provider is out telling Wall Street analysts they will keep more than $300 million of the Durbin savings and not pass it along to their small and mid-sized customers. Will your provider refund 100% of “your” savings to you? How do you know?

At Heartland — as the endorsed provider of this great organization and 44 state restaurant associations and the honest brokers to the restaurant industry which has shaped so many of our lives — we will pass the savings from the debit interchange reform back through to every single customer, no matter how large or small, and no matter how intelligent or naïve on this issue.

Please make sure that you talk to your provider — whoever it is — to ensure that they do the same for you…

Let’s get this Durbin Amendment in place on July 21 and make sure each and every one of you — and your members — receive its full benefits!”

Exclusively endorsed provider for:

44 State Restaurant

Associations