NRF applauds swipe fee fix
Casual Living Staff -- Casual Living, July 21, 2010
Washington - The National Retail Federation said it welcomed today's signing of financial reform legislation that includes provisions to control the $48 billion in credit and debit card swipe fees paid annually by retailers and consumers.
Now the NRF wants regulators to pursue major reductions in the fees.
"Big banks lobbied hard to keep this legislation from becoming law and we fully expect them to put pressure on the Federal Reserve as it drafts the regulations intended to result in the ‘reasonable' debit card fees sought by Congress," said Matt Shay, president and ceo of the NRF.
Among its provisions, the Dodd-Frank Wall Street Reform Act of 2010 signed by President Obama today requires the Fed to consider banks' actual costs for processing swipe transactions and the fact that paper checks drawn on the same accounts are paid at face value. The amendment would also bar the card industry from interfering with merchants who offer a discount or other benefit to customers who pay by cash, check or debit card rather than credit cards, and would allow merchants to set minimum purchase amounts of up to $10 for credit cards.
Swipe fees are a percentage of the transaction charged by card company banks each time a card is swiped to pay for a purchase and average between 1% and 2% for debit cards and 2% or more for credit cards.
The pass-along cost to consumers averages $427 per household annually, according to NRF estimates.
Today's actions show, Shay said, that Congress "realizes that debit cards are simply plastic checks."