Protect Swipe Fee Reform
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For years, big banks price fixed the “swipe” fees merchants are charged when shoppers use debit cards to make a purchase, driving up consumer prices by hundreds of dollars a year.
In 2010, Congress passed the Durbin Amendment, which allows banks to charge as much for debit card swipe fees as they like as long as they set the amount independently and competitively or face a limit if they refuse. So far, virtually no major bank has taken advantage of this opportunity even though they could charge as much as they like if they would simply compete.
Consumers have saved about $6 billion a year because lower swipe fees mean lower prices, but the opportunity for competition has been lost.
The Durbin Amendment simplified
Whenever consumers use a credit or debit card to make a purchase, the merchant’s bank skims a percentage off the top. These hidden swipe fees drive up the price of merchandise, costing the average American family more than $400 a year through higher prices.
Credit card swipe fees make up $2-3 out of every $100 consumers spend in stores or online.
The Durbin Amendment cut debit card swipe fees roughly in half, from about 45 cents on the typical transaction to about 22 cents, saving consumers about $6 billion a year.
It’s time to tell Congress a vote to repeal Durbin is a vote against competition.
If you think banks should compete, please sign our petition.
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Credit and debit card swipe fees cost retailers and their customers $30 billion each year.