Consumers are increasingly opting to pay by card over cash. Leading the growth is debit cards. According to the Federal Reserve Payments Study, non-prepaid debit cards reached 87.8 billion transactions, or approximately 56 percent of all card payments in 2021. 

For community banks, debit is a critical component of the financial statement, impacting both income and expenses. Choosing the right debit network partner as your second unaffiliated network comes down to the “3 Ps”: profit, protect and people. All of which directly impact your net interchange income for years to come.  


Profit revolves around net interchange

Each network affiliated with your debit cards has its own set of interchange rates and fees. When your cardholder swipes, inserts or taps their card to buy something, the merchant (and its acquirer processor) chooses which network the transaction will travel over, typically based on lowest merchant cost. 

Interchange is one thing. Net interchange is the much bigger deal.
In the example below, network 1 provides the better interchange rate, but with high network switch fees, the card issuer earns less on this transaction. Network 2 has a slightly smaller interchange rate, but with significantly less switch fees, meaning an issuer earn more net interchange with network 2.