Court ruling for lower debit card fees benefits retailers
August 20, 2013

Many businesses understand the importance of investing in credit card processing software. From increased consumer satisfaction to higher revenue, companies that accept debit card payments greatly benefit from investing in the purchasing method.

Despite these benefits, many smaller retailers have been unable to invest in the technology due to bank fees for accepting plastic. According to The New York Times, the Federal Reserve has been investigating the interchange fees to lower the limit of how much banks can collect from retailers. Lower fees would be a significant benefit for both consumers and retailers by reducing the amount banks can collect through debit card transactions. The Fed had previously ruled in favor of banks by limiting the cap that was introduced in 2011, but a judge recently questioned the fee cap, arguing it wasn't low enough for retailers and consumers.

According to The Washington Post, the U.S. district court judge ruled the caps were too high and stated the Fed allowed banks to keep interchange fees high because of extensive lobbying activities carried out by the banking industry. U.S. District Judge Richard Leon ruled the Fed's 2010 financial overhaul rule was intended to rework the limit of how much banks can charge retailers for accepting debit cards. However, the Fed had originally proposed a cap of about 12 cents, but it was made to include additional payment processing items, such as the cost of equipment, The Post explained.

The new ruling greatly benefits retailers across the country that already accept debit cards at the point of sale. Being able to accept a customer's preferred payment method allows businesses to retain customers and drive sales, boosting revenue and the enterprise's bottom line.

Nexus: G-WEBCD1