It’s been a big week for retailers following the debate over credit and debit card swipe fees – and with nearly $50 billion a year at stake, who isn’t following this?
As NRF President and CEO Matthew Shay explains in an open letter to the retail industry, the action began on Wednesday. That’s when The Hill newspaper cited NRF’s work at getting swipe fee reforms into this summer’s financial services reform bill as one of the “Top 10 Lobbying Victories of 2010.”
Then, on Thursday, the Federal Reserve unveiled proposed regulations to implement those swipe fee reforms. The Fed says swipe fees for debit cards should be capped at no more than 12 cents per transaction rather than the current structure of 1 or 2 percent of the purchase price. That means a retailer would pay his or her bank 12 cents to process a $100 transaction rather than about $1.50. That’s a significant step forward, but NRF is still pushing for no fee at all since debit cards are just plastic checks and paper checks drawn on the same bank accounts are cashed at face value.
USA Today says the Fed action, once made final, could cut debit swipe fees by 90 percent. The paper also quotes Dean Sheaffer of NRF member Boscov’s as saying the savings on fees could help retailers hire more employees or add stores. NRF General Counsel Mallory Duncan tells the Los Angeles Times that retailers will share the savings with customers, either as discounts or other benefits.
As Matt explains in his letter, these accomplishments on swipe fees are evidence of what retailers can do when they work together. NRF plans to devote more resources to advocacy going forward and hopes to see even more victories.