The US Senate has voted in favour of including a cap on debit card fees in the financial services reform bill.
The bill, which is to be voted on this week, would keep fees “reasonable and proportional” and make it easier for retailers to set minimum purchase amounts for credit cards and offer benefits to customers who do not pay by card.
Card fees are around 1-2% for debit card transactions but can be more for purchases paid for by credit card. In 2008 so-called ‘swipe fees’ charged to retailers by Visa and MasterCard totalled $48 billion with $20 billion coming from the use of debit cards alone.
“For years, these soaring fees have been taking billions of dollars out of consumers’ pockets and driving up prices.” said Mallory Duncan, National Retail Federation senior vice president and general counsel. “This legislation will put an end to retailers being forced to accept ‘Visa Dollars’ that are only worth 98 cents today… This bill will take us a lot closer to a dollar being a dollar again.”
The decision will be viewed with interest in the UK too, where the fees charged by card schemes have proved controversial with retailers. Earlier this month the British Retail Consortium demanded Visa and MasterCard reduce their fees, saying that the average credit card transaction costs a retailer 34p in fees.