The Federal Reserve Board issued a final rule to limit swipe fees imposed on retailers when accepting debit card payments at $.21 per transaction, effective October 1, 2011. Banks and payment processors may also charge $.01–$.03 more to cover fraud prevention and other adjustments, bringing the total potential fees to $.24. The limit is higher than the $.12 fee proposed last winter but less than the current average of $.44.
The Federal Reserve was authorized to regulate debit card fees under last year’s financial reform bill based on what it believes to be “reasonable and proportional.” The Federal Reserve’s power, however, does not extend to credit card fees. Credit unions and small banks with less than $10 billion in assets are exempt from the swipe-card limits, although merchants are not required to accept their cards.
For more information, contact Stuart Gosswein at stuartg@sema.org.