Yesterday, the Senate voted against postponing swipe fee reform for debit cards, causing celebrations among the natural retailer community as debit card transaction fees are poised to fall from 44 to 12 cents.
Yesterday, the Senate voted against postponing swipe fee reform for debit cards, clearing the Federal Reserve to lower and cap swipe fees to 12 cents from the current average of 44 cents per transaction. The lower fees, imposed upon retailers by card companies, will put more cash back into a retailer's pockets in hopes of passing savings along to the consumer.
Natural products retailers—especially independent retailers—can breathe easier with their new ally: Senator Dick Durbin (D-Illinois), sponsor of the swipe fee amendment. During a six-month debate, Durbin openly criticized Wall Street banks, which opposed the reform and cited millions of dollars in lost profits. Durbin also sponsored the Food Safety Modernization Act.
Swipe fee reform will become law on July 21. The new reform limits price fixing and requires banks to charge an amount that is "reasonable and proportional" to their costs. Debit card fees exceeded $16 billion in 2009, according to NFM, and debit card fees currently average 1-2 percent of each purchase.
In April, Natural Foods Merchandiser reported that more than 200 grocers met in Washington, D.C., to urge lawmakers to implement the rules included in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed by Congress last year.
That reform was delayed when Senator Jon Tester (D-Montana) introduced the Debit Interchange Fee Study Act of 2011 this year, which would have postponed swipe fee reform by two years and require the issue to be studied. The 54 to 45 vote lacked the 60 votes it needed to pass.