Senate and House members have agreed to slash the debit card fees that the banks charge to retailers and other business owners for accepting debit cards at their businesses. These fees ranged from 1%-2% of the cost of products sold by the merchants. Many of the larger retailers stand to gain several million doallrs per year as a result of this ruling. Walmart stands to gain the most as 17% of purchases are made with debit cards.
The banks are not happy and claim they may have to raise other fees to make up for the losses. An attorney for MasterCard states the losses may be passed on to the consumer. Currently, approximately 13.4% of all purchases are made with debit cards and pre-paid cards.
The Federal government will now monitor the fees costs and will be checking to make sure the fees are “reasonable and proportional to processing costs.” The following decisions were mandated by Congress:
Banks with over 10% in assets would be subject to fee oversight.
Government administered debit cards and reloadable prepayment cards would be exempt.
Merchants would be allowed to offer discounts for use of cash instead of debit.
Merchants could set a $10.00 minimum for card transactions.
It is questionable whether the banks would really stand to lose on this recent ruling because they are now stating that they may have to raise other fees to make up for their losses. The consumer stand to lose here as retailers and other merchants stand to gain. The retailers have joined to lobby Congress about credit card fees and have been fighting legislation for the last two years. They have a website which provides information on their stand on credit card fees and the action they are taking.