Restaurants expected to benefit from lower swipe fees
Because of the large amount of transactions they purchase that involve debit accounts, rather than credit card debt, restaurants are expected to be major beneficiaries of the new, lower swipe fee laws enacted by the federal government.
New data from KeyBanc Capital Markets suggests the average restaurant conducts about 35 percent of its business on customers’ debit cards, and the new, lower fees for this type of transaction will be a boon for the industry, according to a report from the Associated Press. With swipe fees falling an average of 70 percent, profits could rise between 1 and 4.5 percent.
The improved savings would be most beneficial to restaurants that tend to carry lower prices because they tend to conduct a large number of transactions, even within the industry, the report said.
The Federal Reserve’s proposed limit on debit card fees will be enacted in mid-July, after moving forward when Republicans in the U.S. Senate could not garner enough votes to delay the rule so that its effects could be studied further.