On May 7, 2021 the Federal Reserve Board of Governors issued a Notice of Proposed Rulemaking to amend Regulation II which, if enacted, will require all financial institutions to ensure that card-not-present transactions can be successfully routed over at least two unaffiliated payment networks. The implication of this clarification, if enacted, will affect financial institutions, merchants, processors and networks. Community banks and smaller credit unions that currently do not support two networks for e-commerce transactions will see a significant drop in interchange revenue for those e-commerce transactions that are routed through EFT debit networks and not a global network. This announcement also sets the groundwork for future changes to the regulation with far reaching fee implications for the debit card market as a whole.

The proposed change is all about money. What is missing from this announcement is any consideration for cardholders and how they may be impacted by clarifications of the law.