President Signs Swipe Fee Reform Into Law

Interchange relief became a reality today as President Obama signed the financial services reform bill into law.

The new law contains Senator Richard Durbin’s swipe fee amendment, which is expected to result in lesser debit card interchange fees and bring critical financial relief to retailers and consumers while promoting greater competition within the credit card industry. 

“This legislation represents a huge accomplishment that we could not have achieved without the significant response of NACS members to our grassroots calls to action,” said NACS President and CEO Hank Armour. “Our Interchange Fee Reform Petition Drive gathered more than 5.4 million signatures demanding that Congress take action to reform the interchange system, making it the largest petition drive on a legislative issue in U.S. history.  Further, the thousands of person-to-person calls and meetings by our members with their elected representatives as well as the letters that many of them wrote were vital in communicating the facts supporting our initiative and the passion constituents had for the issue.”


-Within nine months the Federal Reserve must issue standards for debit interchange fees that are reasonable and proportional to the cost of the transaction. Within 90 days thereafter fees must be adjusted accordingly.

-In that same time frame, the Federal Reserve must write rules implementing non-exclusivity of debit networks, meaning that a debit card issuer must offer retailers at least two networks through which debit transactions can be processed.

-It immediately allows retailers to set a minimum transaction level (not to exceed $10) for credit card transactions.

-It immediately allows retailers to discount for different methods of payment and significantly liberalizes the form of discounts and permitted discount marketing language.

“The war on interchange fees is far from over,” said Armour. “We must engage with the Federal Reserve over the next nine months to ensure that appropriate standards are issued, and we must continue our battle to reduce interchange fees on credit card transactions.”

Armour added that this legislative achievement was “a classic exercise of all the necessary pieces coming together,” including well-developed research supporting the NACS position, effective Capitol Hill lobbying, significant funding for effective and targeted media campaigns, overwhelming and demonstrative grassroots support, and broad-based individual constituent engagement with elected representatives. “It is a model NACS must institutionalize in the representation of our industry.”





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