A postponement of the debit card swipe fee
reform could cost US retailers and their customers more than $1bn
per month, the National Retail Federation (NRF) warned
Congress.
It is claimed by the NRF that the Fed’s
proposal to lower debit card fees does not go far enough and argues
that debit transactions should be paid at close to face value as
debit cards are “merely plastic cheques”. The Fed is said to be
reviewing comments on its proposal and is required to issue a final
version in April, with the rules to take effect in July.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
“Congress recognised last year that the credit
card companies and big banks have been extracting monopoly-like
fees from merchants and their customers for far too long,” said
Mallory Duncan, NRF’s SVP and general counsel.
“Now that reform is about to go into effect,
the card industry is asking for a do-over they don’t deserve. Every
month they can push back reform is another billion dollars taken
out of consumers’ pockets. We would rather use that savings to cut
prices, provide more retail workers with health insurance or put
more Americans to work.”
The Fed was instructed to establish
regulations that would result in ‘reasonable’ debit card fees
proportional to the banks’ cost of processing debit transactions.
It has been proposed that debit swipe fees, which currently stand
at 1-2%, are to be capped at 12 cents per transaction. Financial
institutions with less than $10bn in assets would be exempt.
The fee reform was included in 2010’s
Dodd-Frank Wall Street Reform and Consumer Protection Act.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe House Financial Services Committee’s
Subcommittee on Financial Institutions held a hearing earlier this
week on the debit card swipe fee regulations as proposed by the Fed
in December 2010.
The hearing has been billed as an examination
of the proposal but the card industry is reportedly seeking
legislation that would delay implementation of the regulations by
anywhere from six months to two years.
