The Federal Reserve will meet on October 25 to discuss “proposed revisions to the Board’s debit interchange fee cap,” according to a notice from the government website.
Associations including the National Association of Convenience Stores and the Food Industry Association said they welcome the discussion and hope the Board decides to support merchants by lowering transaction fees.
“Debit cards are an electronic version of checks that have saved banks billions compared with handling paper checks, but swipe fees make them much more expensive for merchants and drive up prices for consumers,” said Doug Kantor, NACS general counsel and Merchants Payment Coalition executive committee member, in a statement. “The Fed tried to address high debit card fees over a decade ago but didn’t go far enough, and banks’ costs have continued to fall while fees have stayed the same. It’s time for the Fed to update how much banks are allowed to charge and recognize that consumers, merchants, and the economy can’t afford overinflated fees.”
The NACS further explained that debit card swipe fees cost merchants and customers roughly $33.4 billion in 2022, citing data from the Nilson Report. After labor, these fees can be a merchant’s highest operating cost.
“FMI applauds the Federal Reserve Board of Governors for scheduling an open meeting to propose adjusting debit card swipe fees,” said FMI president and CEO Leslie G. Sarasin in a statement. “We have long advocated for the Federal Reserve to reduce the regulated rate to reflect the significantly reduced cost of processing these transactions as was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.”
Both trade associations have a history of working together to reform the grocer and merchant fee structure.
“FMI and the National Association of Convenience Stores jointly petitioned the Board in December 2022 to take action on the debit regulated rate. We are very pleased that the Board is heeding grocery retailers’ call for reform, and we look forward to continuing to work with the agency to ensure a competitive, efficient, secure payments marketplace,” said Sarasin.
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