Heartland Payment Systems Inc. on Feb. 9 reported a fourth quarter drop in interchange revenue caused by new federal rates for debit card transactions, but the processor still posted a sizable increase in net income.
The payment processor reported total revenue for the quarter ended Dec. 31 of $471.4 million, down 1.4% from $478.2 million a year earlier. Net income was up 68.7%, to $11.3 million from $6.7 million, the Princeton, N.J.-based card processor said.
Interchange revenue fell 9.6%, to $304.4 million from $336.8 million, driven by the effects of the so-called Durbin amendment to the Dodd-Frank law. Heartland had said before the Federal Reserve Board on Oct. 1 reduced debit card interchange rates that its intention was to pass along the savings to its merchant clients.
“Durbin dollars keep rolling back to merchants as Heartland continues to pass along 100% of the new, lower debit interchange rates,” Robert Carr, Heartland chairman and CEO, stated in a company earnings release.
But the interchange revenue drop did not affect Heartland’s profitability.
“We ended the year on a high note,” Carr said, pointing to improvements in financial performance and productivity at Heartland as keys in delivering positive income numbers.
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