The U.S. Federal Reserve on Wednesday proposed slashing by nearly a third the amount of so-called “swipe fees” banks can charge merchants for processing debit-card transactions, setting up a pitched battle between the two industries over potentially billions of dollars in revenue.
Citing data that showed the costs of processing such transactions had fallen by roughly half in recent years, the Fed proposed cutting the current cap from 21 cents per transaction to 14.4 cents per transaction.
The proposal, which is now open to public feedback, marks the first time the Fed has adjusted the fee cap after it was set in 2011. Banks charge retailers when processing debit-card transactions, and the Fed was ordered to limit those costs to a “reasonable and proportional” level as part of the 2010 Dodd-Frank financial reform law.
The fees generated $31.59 billion for lenders in 2021, according to Fed data.
Read More – Source