Recent legislation cutting debit card transaction fees may not be as beneficial as most consumer advocates, merchants and cardholders think, a recent report says.
The Federal Reserve Board announced last week that it plans to limit the card fees to 12 cents per transaction, The Philadelphia Inquirer reports. This will lower rates to $1.20 when a consumer signs for a purchase and 60 cents when [they use] a PIN number for verification.
“We think the unintended consequences of this legislation will be an environment that is actually bad for consumers, not good for them,” said Thomas McCrohan and Len DeProspo, Janney Capital Markets financial tech analysts, according to the news source.
McCrohan and DeProspo say other countries such as Australia, have tried similar maneuvers only to see merchants pocket the additional savings, the news provider reports.
However, the new regulations have yet to be put in place, and as a result consumers may have to wait to see if the changes can help them save money at the checkouts.