On October 1, 2011, the provisions of the Durbin Amendment became law, which means that the Federal Reserve will be regulating the interchange fees for debit cards in the U.S. The new law will reduce, by nearly 50%, the average amount that retailers pay for debit card transactions. This includes limiting the transaction fee to no more than 21 cents for financial institutions with at least $10 billion in assets, vs. the 44 cents per transaction we had in the past.

This is actually much better news than what was expected back in April 2011. Financial institutions should see this as an opportunity to strategically structure their debit card business, building a strategy that enables them to prepare their business for these upcoming changes so that they stay profitable and successful.

Keep in mind, the success of financial institutions is not solely based on interchange revenue. It's based on gaining and retaining customers so that they will continue to use the financial institution various products and services. Let us remember what this is all based on - balancing the power among financial institutions, merchants, regulators and, most importantly, consumers. According to Javelin Research, "In 2009, 54% of consumers felt less trust in financial service companies than they did the previous year."

What will set financial institutions apart from others in the industry and help them gain long-term growth objectives and continue to stay profitable is the service they can provide to consumers?

If card issuers focus on offering superior customer service, they will be able to build a loyal and highly committed customer that will increase their ability to cross-sell other products and services, obtain referrals and gain and retain customers. Think of this time as a way for financial institutions to modernize their strategy to offer consumers what they want - which is convenience, simplicity, innovation and responsiveness.

Financial institutions should offer various products, solutions and services that encompass a card issuance and payment personalization environment that can adapt to the changing needs of today consumers this can include a central andinstant issuance model for various card types such as debit, credit, ATM, prepaid, contact, contactless, EMV®-compliant cards, and/or mobile payment personalization.

If financial institutions act now to offer these products and services to consumers, they will stay ahead of the trends, differentiate themselves in the market, and ultimately succeed and stay profitable.

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