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Well, there is theory, and there is real world. In the real world, reductions in debit card fees (in the USA, via the Durbin Amendment) have not lead to lowere
by pravda 9y ago
Well, there is theory, and there is real world.
In the real world, reductions in debit card fees (in the USA, via the Durbin Amendment) have not lead to lowered prices, just increased profits. [1]
This explains why merchants care about processing fees.
[1] From page 27 of
https://www.law.gmu.edu/assets/files/publications/working_papers/1418.pdf https://www.law.gmu.edu/assets/files/publications/working_pa...
"In the year following Durbin’s implementation, gasoline retailers realized more than $1 billion in savings from reduced interchange fees. But 'while this should mean savings of roughly 3 cents per gallon, no savings have been passed on to consumers.' This is particularly remarkable and instructive given that the retail gasoline industry is highly competitive, and at least one other study has demonstrated that gasoline excise taxes are almost instantly and fully passed through to consumers"
- argonaut 9y agoYour own report contradicts your argument all over the place. "There is little doubt that the Durbin Amendment had a major effect on consumers — and would-be bank customers — as issuers have, in various ways, passed on some of the costs of reduced interchange fee receipts, as discussed above" " retailers of smaller ticket items in particular have seen increased interchange fee costs as a result of the Durbin Amendment, and there is anecdotal evidence that these fees are being passed on to consumers" I didn't bother reading the entire report, either.