|
In the coming year, restaurants and other retailers may realize lower costs associated with credit and debit card transactions.
The Wisconsin Restaurant Association and our partners at the National Restaurant Association have worked for years to raise awareness of credit card “swipe fees.” Congress recently responded, passing a financial reform bill that will limit debit card transaction fees and allow discounts for customers paying with cash or other preferred forms of payment.
The bill will allow you to:
- Set minimum amounts ($10 is the maximum level) for credit card usage. Setting minimum transaction levels is currently prohibited by MasterCard and VISA, although most operators lose money on small credit card transactions.
- Offer discounts to customers that pay with cash, checks or debit cards, thus reducing the number of credit card transactions and related interchange fees.
Both of these provisions went into effect on July 22, 2010 the day after the bill was signed by President Obama.
The bill also authorizes the Federal Reserve to issue regulations that ensure interchange fees imposed on debit card transactions are "reasonable and proportional." Debit cards are more like checks than credit cards and should not be subject to the level of fees currently charged. When a debit card is used for payment, no money is actually being borrowed by the customer. The funds are merely being transferred from the customer’s checking account.
The Federal Reserve must determine what is "reasonable and proportional" and issue the debit card fee regulations by April, 2011. It will become effective in July, 2011. WRA will follow this process and report the results to members.
While this bill does not eliminate credit card fees as a significant business expense for retailers, it should provide some meaningful relief.
|
|
|
Financial Reform Bill Passes
