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Clash over debit card routing persists in comments to Fed


Clashing comments have gushed into the Federal Reserve in the past two months over its proposal to clarify rules on the routing of debit card transactions, and they show familiar battle lines being drawn.

The Fed in May proposed a clarification of existing rules requiring that debit card issuers ensure that at least two unaffiliated payment card networks are available for routing debit transactions. It had given interested parties until July 12 to comment and 41 comments have been filed to date, but on June 22 the central bank board extended the deadline for comments to Aug 11.

Nonetheless, it’s clear that commenters’ so far, including merchant groups and bank supporters, are taking the same opposing stances they’ve had for years. At issue is whether merchants and their consumers have access to competing networks for routing debit card transactions. Merchants and their interest groups have long argued that having more than one network available for routing holds down costs for consumers while companies that take fees for processing such transactions, including card networks and banks, have said that’s not necessarily the case.