Retailers applaud reports regarding swipe fee reform

The retail industry's two major organizations are applauding reports that the House will drop efforts to repeal debit card swipe reform.



Debit reform was enacted as part of Dodd-Frank in response to the card industry’s practice of price-fixing the debit card “swipe” fees banks charge merchants to process transactions. The fees previously averaged 1% to 2% of the purchase amount, and virtually all banks that issue cards charged the same. The National Retail Federation said that swipe fee reform has saved retailers and their customers more than $40 billion and brought badly needed competition to the payments market.



"This is a major victory for the consumers who have saved billions of dollars under swipe fee reform and for the communities where retailers have used swipe savings to improve customer service, create jobs and boost the local economy,” NRF senior VP and general counsel Mallory Duncan said. “Repeal of reform would have allowed banks to return to the uncompetitive market that allowed them to set these fees as high as they liked."



According to reports, House Republicans leaders will remove the repeal of swipe fee reform (Durbin Amendment) from the Financial Choice Act before it is voted on by the full House. Retailers opposed efforts to repeal the bipartisan provision passed in 2010 as part of Dodd-Frank that stopped large banks and card



"Preservation of swipe fee reform is an important victory for retailers and consumers who would have faced higher fees from the country's largest banks with every swipe of a debit card," said Austen Jensen, VP of government affairs and financial services for the Retail Industry Leaders Association.



The House is expected to vote on the bill after it returns from its Memorial Day recess in June, and leadership conducted a whip count this week to determine support for the overall measure and provisions such as the repeal of swipe-fee reform. A number of Republican House members expressed concerns about repealing swipe reform, and reports indicate that agreement has been reached to drop the provision.



"We will continue to follow this bill to the end and ensure that repeal is not included in the final legislation,” said NRF's Duncan.