MCCLEAN, Va. - In a "Hatfields versus the McCoys" piece by USA Today last week, some of the myths about swipe fees came to light, such as whether retailers are passing on savings to their customers following enactment of the Durbin Amendment.
Retailers in the United States pay the highest swipe fees in the industrialized world, and swipe fees have become convenience and fuel retailers€™ second-highest operating cost after labor.
USA Today noted that free checking has not disappeared under the Durbin Amendment, as the banks claimed it would. In fact, more banks offered free checking after reform than before and overall prices on bank accounts dropped.
In the second half of 2011, 39% of banks offered checking accounts with no monthly maintenance fee, up from 35% for the first part of the year, according to a survey of the 50 largest banks and 50 midsize and small banks by MoneyRates.com.
Even at the big banks that charged a fee for checking accounts, the average cost fell to $11.28 from $11.75, the survey found. The average minimum balance required to avoid a monthly fee also fell, to $391.41 from $412.53 in mid-2011.
Also, small banks have benefitted from the reforms. The rates those banks charge on debit cards has not been driven down at all by Durbin, which does not apply to them. "So far, it has turned out to be not nearly as bad as we were concerned," Bill Hampel, chief economist for the Credit Union National Association, told the newspaper.
Debit cards are still offering rewards, though some programs have changed strategies. "Instead of cash back or miles, some banks have switched to rewards programs that give debit-card holders points that can be used to get discounts on specific purchases, said Alex Matjanec, co-founder of MyBankTracker.com.
For example, a consumer who buys a lot of coffee might receive points that can be used to get a discount at Starbucks.
Finally, savings for consumers would have been bigger, but the Federal Reserve€™s mistakes in setting its rules let banks charge more for small purchases.
Retailers who previously paid as little as 4 cents on a small debit card transaction found themselves hit with a 21-cent fee.
"A customer buying a can of soda on a debit card is costing me more today than it did before the legislation," said Ari Haseotes, president of Cumberland Farms, which operates about 600 convenience stores in 11 states.
"Were the Fed to reform its rules," said Doug Kantor, counsel to the Merchants Payments Coalition, a group of retailers that fights exorbitant swipe fees, "consumers would be saving even more."