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ATMIA makes a case for changing Reg II routing rules

The association contends that competition between payment networks is eroding due to the unintended consequences of the Durbin Amendment.

September 29, 2014

The ATM Industry Association has released a new paper, "An Industry Discussion: Should changes be made to Reg II in order to increase competition between payment networks?"

In a news release, ATMIA said it has growing concerns that competition between payment networks is eroding due to the unintended consequences of the Durbin Amendment — in both its method of implementation and its impact on EMV migration in the U.S.

Today, network fees and routing decisions are set largely within the relationships between networks and issuers, which results in limited competition.

ATMIA recommends adding language to Reg II that would prohibit the restriction of ATM operator routing options to the networks enabled on an issuer's debit card. This would create new competition between networks for routing selection by those operators and result in downward pressure on network fees, the release said.

ATMIA U.S. executive director David Tente and several of the association's board members met with the Federal Reserve Board in Washington, D.C., on July 22 to discuss the issue.

Executive management for the retail payments section of the Reserve Bank Operations and Payments Systems Division attended, along with legal counsel and a senior Fed economist.

"This was a rare opportunity to help the Fed board better understand the workings of our industry and the shifting of the competitive landscape for regional ATM networks," said Tente. "The paper being released today represents our efforts to frame this issue in a way that will help others in the payments industry to better understand why it is so important." 

ATMIA provided a copy of the paper to the Federal Reserve Board. In the release, the association said it intends to keep issues of network competition and routing choice in the public spotlight.

Download the full paper.  

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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