Debit Card Reform Should Progress More

Debit fees in the United States still remain among the highest in the industrialized world.

October 02, 2015

WASHINGTON – Debit-card reform, which began four years ago with the passage of the Durbin Amendment, has helped both retailers and consumers by decreasing outrageously high debit fees (due to market dominance by Visa and MasterCard). However, debit fees in the United States still remain among the highest in the industrialized world.

Statistics from leading economist Robert J. Shapiro calculate that the Durbin Amendment has saved consumers approximately $24 billion and supported about 150,000 jobs during the four years since it became law. But much more work remains to be done to reform the debit and credit card industry.  The Richmond Federal Reserve discovered that 90% of retailers recently surveyed reported that they weren’t aware of any drop at all in the debit card swipe fees they pay.

Currently, every time a customer swipes a debit card to make a retail purchase, a bank makes a profit that can exceed 500% of the purchase price, according to the Merchants Payments Coalition (UnfairCreditCardFees.com), a group of businesses (including NACS) that are fighting unfair credit card fees.

“The law is clearly a big first step in the right direction,” said Lyle Beckwith, senior vice president of government relations at NACS. “But clearly the Fed hasn’t strictly followed Congress’ intent to make this market completely competitive. 

“The Fed has to consider its rules periodically, and merchants would urge it to do just that and finally make this market conform to the same conditions our free-market system imposes on every other part of our economy.”

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