Hardware Retailing The Industry's Source for Insights and Information
A debit card swipe fee regulation that has saved business owners more than $40 billion over the past five years may be in danger of being repealed through a recently proposed bill, according to the National Retail Federation (NRF).
What is the bill in question?
Earlier this month, the House Financial Services Committee held a hearing regarding debit card swipe fee reform, NRF reports.
The hearing addressed the Financial CHOICE Act, which would reverse the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act has been in effect since 2010 and is responsible for tightening bank regulations. It includes the Durbin Amendment, which regulates how much debit card issuers can charge retailers for card transactions. If the Choice Act is passed, the Durbin Amendment will be repealed.
How might this impact retailers?
Before the Durbin Amendment went into effect in October 2011, debit card companies could charge retailers up to 45 cents per transaction. Durbin limited that fee to 22 cents.
“Debit card swipe fee reform has brought competition and transparency to the debit card payments market,” says NRF senior vice president for government relations David French in a letter to House Financial Services Committee. “Repealing reform would only undermine transparency and competition, further lining banks’ pockets.”
French continues in his letter expressing concern not only for additional costs to retailers, but the effects on consumers if the Durbin Amendment is repealed.
“Swipe fees are a major concern, especially for small retailers,” French says. “If debit card swipe fee reform is repealed, costs to retailers will only increase, meaning higher prices for consumers and less opportunity for retailers to grow their businesses, provide jobs and support community efforts.”
How are retailers advocating for their position?
Retailers met with lawmakers on Capitol Hill on the day of the original hearing to express their concerns about repeal. Additionally, NRF submitted a statement for the record, ran a digital ad campaign and delivered thousands of email petitions urging Congress to spare debit card reform.
