Debit routing is the choice of which payment network processes a debit card transaction when the card is enabled on more than one network. A typical US debit card carries a global brand such as Visa or Mastercard and at least one other network, often a PIN network such as Star, NYCE, Pulse or Accel. Because each network charges different fees, the route a payment takes affects how much the merchant pays.
In the United States, the right to choose the route belongs to the merchant under the Durbin Amendment and the Federal Reserve's Regulation II. Debit routing is related to, but narrower than, least-cost routing, which is the practice of picking the cheapest available route, and is a policy term in Australia. It is distinct from general payment routing between acquirers or processors, which a merchant controls through its own contracts.
Debit routing in plain terms
Imagine posting a parcel when two delivery companies serve the same street. Both will get the parcel there, but one charges less. If the label on your parcel lists both companies, you can pick the cheaper one. A debit card with two networks on it is like that label: either network can carry the payment from the shop to the customer's bank.
For years, banks sometimes printed only their preferred company on the label, or made the second one hard to use, so shops had no real choice. Routing rules say the bank must leave at least two genuinely separate companies on every card and must let the shop decide which one to use. The shopper notices nothing, but the shop's fee bill can change.
Legal basis in the United States
Section 1075 of the Dodd-Frank Act of 2010, known as the Durbin Amendment, added two separate rules to the Electronic Fund Transfer Act. One caps debit interchange for large issuers. The other, which applies to every card issuer regardless of size, deals with routing.
Regulation II sets out the routing rule in two parts:
- Network exclusivity ban. Issuers must enable at least two unaffiliated networks on each debit card, so a card cannot be tied to one network or to networks owned by the same company.
- Routing choice. Issuers and card networks may not stop a merchant from directing a transaction to any network enabled on the card.
Because the routing rule covers all issuers, even cards from small banks and credit unions whose interchange is not capped must carry two unaffiliated networks. Those cards are known as exempt cards, as opposed to regulated cards, for interchange purposes only.
The 2023 card-not-present clarification
When the rule first took effect, many PIN networks could not process online payments, and some issuers enabled only one network for card-not-present transactions. Merchants argued that this left them without a choice for e-commerce payments, the fastest-growing part of debit.
In October 2022 the Federal Reserve Board finalised an amendment stating that issuers must enable at least two unaffiliated networks for all debit transactions, explicitly including card-not-present ones. The change took effect on 1 July 2023. The Board noted that the rule does not require an issuer to guarantee that two networks will in fact be available for every single transaction. Separately, the US Department of Justice sued Visa in September 2024, alleging that it had used its contracts to keep debit volume away from rival networks, and a lawsuit by merchants led to an October 2026 appeals court ruling against the 21-cent interchange cap, which did not concern the routing rule.
How routing works in practice
At the terminal or payment page, the merchant's acquirer or processor reads the networks enabled on the card and sends the transaction down one of them according to the merchant's preferences. In stores, customers once chose by pressing "credit" or "debit" or entering a PIN. Many networks now also offer PIN-less debit, which lets the merchant route a debit payment to a second network without the customer entering a PIN.
The choice is not purely about fees. Networks differ in fraud protection, dispute rules, approval rates and support for digital wallets, and they also charge their own scheme fees. Some global networks offer merchants lower rates in return for routing most volume to them, which critics say weakens the competition the rule was meant to create.
Debit routing in Australia
Most Australian debit cards are dual-network cards, carrying the domestic eftpos network and either Visa or Mastercard. The Reserve Bank of Australia has long pressed the industry to offer least-cost routing, also called merchant choice routing, so that merchants can send contactless debit payments to the cheaper of the two networks. Its October 2021 review set an expectation that every issuer with more than 1% of debit transaction value keep issuing dual-network cards, and that acquirers and payment facilitators offer and promote least-cost routing to merchants for in-person payments. In March 2026 the Bank announced lower interchange caps and the removal of surcharging on eftpos, Mastercard and Visa cards from 1 October 2026, which changes the routing calculation because merchants can no longer pass card costs on to customers.