Now that the Federal Reserve has publicly discussed the proposed rules surrounding debit card interchange and routing in light of the Dodd-Frank Wall Street Reform Act and the Durbin amendment, financial institutions should be preparing for the impact.

The Fed released two proposals for regulation of debit card interchange fees, neither of which distinguishes between authorization methods for debit transactions.

Each issuer would be permitted to determine the maximum amount of an interchange fee that it may receive with respect to a debit card transaction by calculating its average variable cost for authorization, clearance and settlement of electronic debit transactions, but the fee is capped at 12 cents. If an issuer doesn't want to bother determining its average variable costs, an issuer would be permitted to rely on a safe harbor rate set at 7 cents per transaction.