The U.S. House may soon debate new legislation the Senate passed last week aimed at reducing swipe fees small businesses incur each time a customer uses their credit or debit card.
U.S. Sen. Dick Durbin, D-Ill., who sponsored the “Debit Card Swipe Fee Amendment,” said he is confident the U.S. House would take up the measure following Thursday's Senate vote to pass it 64-33.
“Wall Street reform is really about two things: holding the big banks accountable for how they operate and empowering consumers to make good financial choices. Passage of this amendment is a win for the public on both fronts,” Durbin said at a Friday news conference.
According to Durbin, Wall Street banks collected $20 billion in 2009 from swipe fees. Banks and credit unions with assets under $10 billion would be exempted by the amendment, Durbin explained.
He said that the reason for swipe fees by Visa and MasterCard is to cover the cost of processing a credit or debit card transaction.
“Passage of this measure gives small businesses and their customers a real chance in the fight against the outrageously high swipe fees charged by Visa and MasterCard,” Durbin said.
Last year Visa and MasterCard reduced its swipe fees in some countries by 60 percent while at the same time it raised U.S. swipe fees by 30 percent, Durbin said.
If passed, the amendment would direct the federal government to issue rules to ensure that debit interchange fees are reasonable and proportional to the processing costs incurred.
Visa and MasterCard currently charge debit interchange fees of around 1-2 percent of the transaction amount. These fees are far higher than the actual cost of processing debit transactions, which means small businesses and merchants are getting shortchanged.
The amendment would also allow sellers to choose to decline credit cards for small dollar purchases
So a merchant can set a $10 minimum, purchasing limit in order for a customer to use their credit or debit card.
Copyright 2010 Chicago Defender.
