WASHINGTON — The debit-card interchange fee reforms that were signed into law last year and then watered down by the Federal Reserve Board this year are scheduled to take effect Oct. 1, providing some relief for merchants, according to retail trade groups.
Food Marketing Institute, Arlington, Va., cited some of the benefits supermarkets could see from the new rules, including the ability to tell consumers about costs and hidden fees; having an authority watching over debit-card fee increases; greater merchant choice and a more competitive marketplace for debit card payments; and the ability to offer an immediate consumer benefit by allowing discounts for debit and cash.
Consumers and merchants can expect to pay 21 to 24 cents per transaction for cards from banks with more than $10 billion in assets, as opposed to an average of 44 cents per transaction before the reform, according to the Merchants Payments Coalition.
Debit-card fee reform was included in the Wall Street Reform and Consumer Protection Act. Earlier this year the Federal Reserve Board doubled its previously proposed limit on debit-card fees. The rule does not impact credit cards.
Several banks have recently begun adding monthly fees for debit-card holders in response, including Bank of America, Wells Fargo and SunTrust.
"The banks have to make up for this loss of revenue with either new fees or increased rates, and it is always the customer that ends up paying for it," says Bill Hardekopf, chief executive officer of LowCards.com.