Swipe Fee Caps Lowered

Debit card swipe fees are still going down—but not as much
as originally thought.

In its final rule on swipe fee reform, the Federal Reserve announced
June 20
that it will set the limit for so-called debit card fees at 21
cents per transaction, and five basis points multiplied by the value of the
transaction. That is still below the national average of 44 cents, according to
the National Retail Federation. 

The Fed also said that if the issuer enacts specified fraud
prevention policies, the fee could be adjusted upwards to as high as 24 cents.

The Federal Reserve originally proposed capping swipe fees
at 12 cents. The new rule does not impact non-debit credit cards.

The decision was viewed by analysts as a victory for the
credit card issuers, and the NRF slammed it a blow for consumers.

“While the rate will provide modest relief, it does not go
far enough,” said NRF president and CEO Matthew Shay in a statement. “Even
though this rule is specific to debit cards, we are hopeful that it leads to
more transparency and relief from credit card swipe fees as well.”

So-called swipe fee reform was included as an amendment to
the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed
by President Obama in July 2010.  The
Senate rejected an attempt to delay the amendment in June.

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