Friday, December 17, 2010

Debit Card Interchange Fees to Drop Under Fed's Proposed Rules

Merchants will see big reductions in debit card processing fees, if the Federal Reserve prevails under new proposed rules. Retailers pay literally billions of dollars to banks annually in fees to accept debit and credit cards – costs that are passed along to consumers in the form of higher prices for goods and services.

Our retail clients are telling us that they plan to reinvest savings realized from lower interchange expenses into a variety activities, including reducing consumer prices (most visibly on higher-ticket purchases), upgrading POS and back-office systems, implementing green initiatives, remodeling stores, investing in new locations, increasing payroll, and completing other deferred initiatives.

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