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This is great. One of the main reasons I've been rooting for Durbin's interchange fee amendment to be implemented is because interchange fees stifle pricing in
by oasisbob 16y ago
This is great.
One of the main reasons I've been rooting for Durbin's interchange fee amendment to be implemented is because interchange fees stifle pricing innovation. For debit card transactions, the interchange fee is -- on average -- 1.8% . This goes to the bank, and becomes the bare minimum for swipe fees.
Assuming that the Fed goes ahead and implements their proposed rules, interchange fees will drop to less than $.12 for most debit transactions. Square and other progressive providers can pass these savings on, if they so choose.
- othermaciej 16y agoThe Durbin amendment is terrible for consumers though. If banks that issue debit cards can't make their money on interchange fees, then it will be harder and more expensive for consumers to have debit cards. If fewer people have debit cards, then this is ultimately not a net win for merchants. Short version: price controls are still bad economics.