But how are these neo-banks able to offer this while the big banks can’t? The main reason is that these new “neo-banks” aren’t actually banks but rather tech companies that partner with regional banks such as Sutton Bank, Bancorp, or Meta Bank. These regional banks have less than $10 billion in assets and are able to charge a higher Interchange rate because they are considered exempt from the Interchange rules set forth in the Durbin Amendment and are considered “unregulated.” This means that these regional banks are able to issue cards that earn higher “unregulated” Interchange. Instead of
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