Q: Does the net compensation test cover incentives and other payments related to exempt debit card transactions?
A: No. The prohibition against net compensation does not apply to issuers or electronic debit transactions that qualify for an exemption under § 235.5 from the interchange fee standards. See comment 6-1. An issuer may use any reasonable method for allocating the payments between exempt and non-exempt transactions. (Added October 24, 2011)
This Q&A was obtained from FRB’s website, in a section for Regulation II (Debit Card Interchange Fees and Routing) Frequently Asked Questions, which may be found here: