Card issuers and Durbin compromise
Card issuers and Illinois Senator Dick Durbin have come to a compromise over a proposed amendment to the Wall Street bill.
The senator and card giants have been battling against one another for weeks over interchange fees.
Durbin has asserted that the fees are unfair and hurt small business owners and consumers.
Under the modified proposal, merchants will be able to require a minimum sale amount in order to accept a credit card for payment, but the minimum amount may not exceed $10.
Prepaid and government-program debit cards will both be exempt from interchange regulation.
Durbin is satisfied with the modifications to his original amendment.
“I’m pleased that we were able to reach an agreement which makes modifications which strengthen consumer protections and bring competition to a market where there is none,” said Durbin.
The Senate and House of Representatives hope to finalize a version of the bill and have it signed into law by President Barack Obama this July.
Credit card issuers stand to lose a substantial amount in profits if they are forced to cutback their interchange rates. Currently, Visa and Mastercard charge merchants roughly 2 percent whenever a customer pays with one of their cards, according to the National Retail Federation.