The Fed set the debit cap at 21 cents, with an additional penny allowed for fraud-prevention costs and 0.05% for recovery of fraud losses. The ceiling, which applies to financial institutions with $10 billion or more in assets—the so-called “covered” issuers—came in response to the Durbin Amendment to the Dodd-Frank Act of 2010.

Friday’s Fed report indicates online transactions, known as card-not-present volume, sustained $12.40 in fraud losses per $10,000 in volume in 2019, up from $7.80 in 2011. Merchants absorbed 56.3% of these losses, up from 52.8% in 2017, according to the Fed report, indicating that percentage could be even higher now with e-commerce volume booming since the onset of Covid-19.

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