It’s a huge victory for convenience store retailers and merchants across the U.S. today, as the Senate rejected an amendment offered by Senators Jon Tester (D-MT) and Bob Corker (R-TN) to delay swipe fee reform.
The vote was 54-45 in favor of the Tester-Corker amendment, six short of the 60 needed to delay swipe fee reform for six months-effectively killing it, and five more than the 40 votes c-stores were hoping for to protect swipe fee reform.
The Federal Reserve previously found that although a debit transaction costs only four cents to process, merchants are charged on average 44 cents every time a customer swipes a debit card. The Federal Reserve proposed capping interchange fees at 12 cents, a 200% profit on every transaction. The Tester-Corker amendment sought to delay and kill that proposal.
“This vote is an enormous win for consumers, since it fundamentally changes the rules in how banks collect $1 billion every month in debit swipe fees from consumers,” said NACS Chairman Jeff Miller, who is president of Norfolk, Va.-based Miller Oil Co. “The vote means that consumers will now have a choice in how they pay for goods, and retailers will be able to provide incentives to reward customers for selecting lower-cost options, instead of funneling these costs directly to the banks. Today’s vote clearly shows the importance of making your voice heard.”
“This was a 10-year battle to kill the stranglehold that the banking industry has on how our country’s payment system operates and we were fighting against an opponent that has poured hundreds of millions of dollars into maintaining the status quo. Our convenience and fuel retailing industry played a leading role in this historic victory with petition campaigns from a record-setting 5.4 million consumers demanding change, the tens of thousands of letters and calls from retailers to Congress and the hundreds of personal visits that our members made to congressional offices both on Capitol Hill and in hometown offices,” he added.
With swipe fee reform safe, the final rule on debit card swipe fees, as required in the Durbin amendment, is set to be implemented on July 21. The final rule, including where exactly fees will be capped, should be released any day.
Interchange fees are currently the second highest operating cost for most merchants after labor.