Fed Proposes 12-Cent Cap on Merchant Debit Fees.

[elleng]

The Federal Reserve on Thursday proposed a 12-cent cap on the fees banks would be allowed to charge merchants for debit card transactions, a limit some estimated could cut up to 90 percent of the revenue collected through such fees.

Capping debit interchange fees, sometimes called swipe fees, would help merchants. Under the existing system, the Fed said the average debit transaction fee in 2009 was 44 cents per transaction, or 1.14 percent of the transaction. When the customer signed for the purchase in the same way they would for a credit card purchase, known as signature debit, the average fee was 56 cents, or 1.53 percent of the transaction amount.

The proposal also would require that merchants have a choice of unrelated networks . . .

The proposal was made to enact a provision known as the Durbin Amendment that was part of the financial regulatory overhaul bill that became law in July. The provision requires that interchange fees be "reasonable and proportional" to banks' costs for processing transactions.

http://www.nytimes.com/aponline/2010/12/16/business/AP-US-Federal-Reserve-Debit-Card-Fees.html?ref=aponline

[WingDinger]

1. That would be stimulatiive.

[bemildred]

2. I like it, that sounds about right.

The banks most certainly ought not be allowed to charge any percentage of the transaction, it ought to be a flat fee, and a small one.

[Skink]

3. They can keep borrowing at zero percent though.