Swipe Fee Fight Continues

NACS urges retailers to join it on Capital Hill to show support for the Durbin Amendment that regulates interchange fees.

With a new Congress in session, the rule regulating interchange fees runs the risk of being overturned, and NACS is urging retailers to show their government the issue remains important to them.

The Dodd-Frank Wall Street Reform law, enacted last year, included the Durbin Amendment, which requires the Federal Reserve to set rules regulating how interchange fees on debit transactions are set by the credit card companies.

The Fed was instructed to consider the costs banks incur when processing paper checks and make sure fees charged for debit transactions (electronic checks) were “reasonable and proportionate to the cost.” The National Association of Convenience Stores (NACS) and the Merchant Payment Coalition (MPC) argued that because the cost to banks to process paper checks was much higher than for electronic checks, the fee should be no higher than the fee for paper checks…which costs nothing, NACS reported.

In December the Federal Reserve released their first draft of these regulations, which include limiting the per transaction fee for debit purchases to between seven and 12 cents. This represents a reduction of fees of approximately 80%. Yet according to the Federal Reserve, is more than enough to offset the cost of processing these transactions and providing a healthy profit to the largest banks (over $10 billion) that are covered by the law. All but the three largest federal credit unions and all community banks are exempt from the law. The final regulations are due in April, with an effective date of mid-July, NACS noted.

But the credit card and banking lobby has fired back with a huge campaign to repeal or delay implementation of the Durbin Amendment. Hearings have already been discussed in both the House and the Senate. Although the Durbin Amendment had broad bi-partisan support, the banking lobby believes the change in Congress after the elections offers a chance to repeal the Amendment.

NACS and the other members of the Merchant Payment Coalition have worked for seven years achieve this tremendous accomplishment, and now are urging retailers not to allow banks to gain control and succeed in overturning the Amendment.

The banking lobby plans to storm Capital Hill throughout the month of February to push for repeal of the Durbin Amendment, indicating they plan to bring hundreds, if not thousands of bankers to DC to lobby Congress.

NACS urges retailers to attend its NACS’ Day on the Hill on March 9-10.



  1. AnonymousOne says:

    I think they should just do away with credit and debit cards. Who needs them? People can pay in cash or write checks if they want to buy from me. If the check goes bad, I’ll just have to eat it.

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