Debit Card Swipe Fees: Will They Get Slashed?
Debit card swipe fees are one of the more frustrating aspects for business owners that are charged high fees for allowing their consumers to use their debit card to make a purchase. For instance, the current fee for a $100 purchase is in the range of $1.50.
The good news for business owners is that these fees may get limited or eliminated soon. The Federal Reserve has proposed cutting debit card swipe fees up to 90% to take effect in July 2011, something that banks are none too happy about because of the potential huge loss in profits.
Entrepreneur.com cites the logical reasoning behind limiting debit card swipe fees: "debit cards are essentially plastic checks, and paper checks aren't charged a fee." The proposed cap would be 12 cents per exchange, reducing the $1.50 fee on a $100 transaction to 12 cents.
The proposal would hopefully serve to boost retail across the board from the hiring of new employees to increased sales to drive up retail therapy. Officially known as Credit Card Accountability and Disclosure Act, the reduced fees represent a victory for President Obama and Democrat in what is being tagged as a necessary reform to protect American credit card holders and boost the economy.
Related Resources:
- Debit Card Fees To Be Reduced (Fox Business News)
- Avoiding Credit Card Debt (FindLaw)
- Senate Passes Credit Card Act (FindLaw's Free Enterprise)