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The retail world was in an uproar last week about increasing interchange fees related to small debit card purchases. Here’s a recap…
MasterCard and Visa raise fees on small debit purchases
From The Wall Street Journal: In a move that could discourage some merchants from accepting debit cards for small transactions, Visa Inc. and MasterCard Inc. are raising the fees merchants pay for small-ticket debit purchases, according to analysts. The credit-card companies plan to increase the fees—which ultimately are paid to banks, not MasterCard or Visa—to 23 cents per transaction.
Get the full story here.
Bank of America to charge monthly fee for debit card purchases
The Los Angeles Times reported that Bank of America will charge its customers a $5 monthly fee for debit-card purchases. The move was made to counter the expected revenue loss related to newly implemented federal rules. The regulations limit how much banks can charge to process debit card transactions. Those fees now average 44 cents per sale and are paid by merchants. Now, banks won't be able to charge more than 21 cents.
Read more here.
NRF responds to Bank of America debit card announcement
National Retail Federation issued a statement following Bank of America’s announcement.
The organization’s senior vice president and general counsel, Mallory Duncan, had this to say about the $5 monthly fee: “Every time Congress takes a step to protect consumers, the banks use it as an excuse to raise fees. We’ve seen it when Congress limited late fees and overdraft fees and now we’re seeing it with swipe fees. Just as merchants and consumers are about to get some relief, they’re doing it again. That doesn’t mean Congress shouldn’t pass consumer protection laws. It speaks more to the nature of the card industry than to whether swipe fee reform should have been passed.”
Retailers seek ways to pass savings to customers
National Retail Federation also spoke out on potential benefits from interchange reform. This from CSPNet.com: Merchants and their customers will save billions of dollars now that new Federal Reserve regulations cutting debit-card swipe fees roughly in half took effect October 1, according to the National Retail Federation. "Retailers across the nation are developing a wide range of innovative ways to pass these savings along to their customers with lower prices and better value," NRF senior vice president and general counsel Mallory Duncan said.
Read more here.