BRET JOHNSON-SR DIRECTOR OF SALES TSYS MERCHANT SOLUTIONS Durbin Facts BRET JOHNSON-SR DIRECTOR OF SALES TSYS MERCHANT SOLUTIONS ©2011Total System Services, Inc.® Confidential and proprietary. All rights reserved worldwide.

Agenda What exactly is the Durbin Amendment? Changes for businesses accepting card payments Specifics of the Durbin Amendment DOJ Settlement Typical Parking Industry Interchange Rates The Good The Bad and Ugly ©2011Total System Services, Inc.® Confidential and proprietary. All rights reserved worldwide.

What Exactly is the Durbin Amendment? Illinois Senator Dick Durbin introduced a bill into Congress as an amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act. It asked Congress to establish “reasonable fees and limits” to the amount of *interchange*charged by issuing banks for debit card transactions. The Amendment was signed into law by the President in July 2010

Changes for businesses accepting card payments Businesses can now: Set a minimum transaction amount for credit cards Set a maximum transaction amount for credit cards at Federal Agencies and Institutions of Higher Education Offer discounts for payments by cash, check, debit, credit or prepaid. These discounts must be universal and cannot be based on issuer or payment card network

Specifics of the Durbin Amendment Beginning in October 2011, the Federal Reserve made the following changes to debit interchange rates: Debit interchange is set at 0.05% + .22 for all Visa, MasterCard, Discover and Pin Debit Networks Applies only to debit cards issued by banks with over $10 billion in assets (estimate 65%-regionally variances)

DOJ Settlement A Department of Justice Ruling in July 2011 updated Visa/MasterCard regulations to allow businesses to: Issue cash discounts Let consumers know the cost of accepting a particular type of card (example Rewards Cards) Ask for a different type of card which may be cheaper

More Rules Certain card acceptance practices are still prohibited under the legislation. A business cannot establish a minimum for debit or prepaid cards Surcharge for card-based payments Refuse to accept the card if the consumer still opts to pay with it Exclude cards from a particular issuer

The Parking Industry Interchange Interchange are fees established by the card brands (V/MC/Discover) that are paid by businesses accepting cards. 100% of interchange goes to the card issuer (bank) Along with Interchange, card accepting businesses are also charged the following fees from V/MC/D .11% assessments on Gross Sales .0195 per transaction for Visa, and .0185 per transaction for MasterCard and Discover(*2009) .0023 Visa Base II transaction fee .0014 MC KB Tran Fee

Parking Interchange Rates-The Good If you are accepting cards for monthly parking, the Durbin amendment can be beneficial when your customers use debit cards: Old (Pre Durbin) Debit Rate for Visa card not present transactions-1.60% + .15 New (Reg rates) .05% + .22 $90 transaction=Old $1.71 $90 transaction=New .$.39 Airport Parking should also see a break Old .95% + .20 New .05 + .22 $40 transaction= Old $.64 $40 transaction=New $.30

Parking Interchange Rates-The Bad and Ugly For transient parking, the Durbin Amendment was not so kind. At the last minute, V/MC did away with the small ticket discount for regulated debit to make up for the losses they would take on higher ticket transactions Old Visa Small Ticket-1.55% + .04 New (reg debit)-.05% + .22 $12 transaction-Old=$.25 $12 transaction-New=$.25 (rounded) $2.00 transaction-Old= $.09 $2.00 transaction-new=$.24

Is there a way around Durbin? Simple answer is no. There is no way around interchange. Everyone who accepts cards has to pay interchange Be aware that the break even point for Durbin/Old Small ticket is $12. Transactions under $12 will cost you more, over $12 will cost less. I am currently seeing around 80% regulated debit on low average tickets ($1.50-$6.00) Technically there are ways to not allow debit cards at the point of sale, however, you would most likely have upset parkers, and the fact is that credit card payments are offered as a convenience.

QUESTIONS Thank you ©2011Total System Services, Inc.® Confidential and proprietary. All rights reserved worldwide.