A new study by Pulse examined transactions made from 2004 to 2014 from more than 70 debit issuers involving 147 million debit cards and approximately 68,000 ATMs.
Debit issuers received a weighted average interchange of 41 cents for each consumer
debit transaction in 2004, which declined to 24 cents for financial institutions subject to Regulation II, but held steady overall – at 40 cents – for smaller banks and credit unions.
Among exempt financial institutions, signature-debit interchange rates in the past few years have varied little, but on the PIN debit side, the interchange rate for transactions steadily decreased to 28 cents in 2014.
Despite the drop in PIN interchange, smaller banks and credit unions earned annual debit interchange revenue of $112 per card, compared with $59 for those subject to the interchange cap.
Consumers also are making more transactions with their debit cards, using them on average 21.2 times per month in 2014, compared with 16.1 times in 2005, a 31.7% increase.
The average ticket size – $37 in 2014 – is a 7.5% decrease from $40 in 2005, indicating debit cards are being used for many small-ticket purchases, says Pulse’s Steve Sievert. In 2014, 54% of all debit transactions were under $20, up from 47$ in 2009, and one in three were for less than $10.