Fight over swipe fees continues as deadline approaches
Lobbying efforts and campaign contributions by banks have outstripped those from the retail industry in recent weeks, as the deadline for final approval of a Federal Reserve Board rule related to debit card transaction fees looms, according to a report from the Chicago Sun-Times. This rule would limit the price credit networks could charge to businesses for processing a debit transaction to just 12 cents. Currently, these banks make about 44 cents per debit purchase.
The change is expected to cost the banking industry about $16 billion a year, with smaller institutions particularly affected, the report said. However, it could save small businesses tens of thousands per year.
Retailers say swipe fees add to consumer prices, as any debit or credit card transaction comes with a charge to the business from credit networks. This price is always passed on to consumers and may therefore lead to more credit card debt.