Retailers say repeal of swipe fee reform would 'undermine transparency and competition' and harm consumers

"We encourage Congress to support the future of payments and make sure competition is protected."

NRF SVP David French

WASHINGTON – The National Retail Federation today called on the House Financial Services Committee to reject efforts to repeal debit card swipe fee reform as it considers approval of the Financial Choice Act.

“Debit card swipe fee reform has brought competition and transparency to the debit card payments market,” NRF Senior Vice President for Government Relations David French said. “Repealing reform would only undermine transparency and competition, further lining banks’ pockets.”

“Swipe fees are a major concern, especially for small retailers,” French said. “If debit swipe fee reform is repealed, costs to retailers will only increase, meaning higher prices for consumers and less opportunity for retailers to grow their businesses, provide jobs and support community efforts. Rather than repeal a successful provision of law that has brought competition into the payments market, we encourage Congress to support the future of payments and make sure competition is protected.”

French’s comments came in a letter to the committee, which began debate this morning on the Financial Choice Act, legislation sponsored by Chairman Jeb Hensarling, R-Texas, that would repeal debit swipe fee reform as part of a larger rollback of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Committee approval of the bill could come today or Wednesday, with a vote by the full House expected later this month.

The committee is moving forward today even though only a single hearing has been held on the nearly 600-page bill. No retailers were allowed to testify at last week’s hearing despite the impact of the swipe fee issue on the industry. Nonetheless, dozens of retailers held more than 100 meetings on the issue with lawmakers on Capitol Hill the same day. NRF submitted a statement for the record and is running digital ads and has delivered more than 7,000 email petitions addressing consumer benefits and competition that urge Congress to preserve debit card 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 1-2 percent of the purchase amount, and virtually all banks that issue cards charged the same.

Under reform regulations that took effect in October 2011, large banks are limited to 22 cents per transaction, down from about 45 cents in the past. The limit saved retailers about $8.5 billion in the first year alone, with close to $6 billion of the savings passed along to consumers, according to a study by economist Robert Shapiro. Banks that set the fees competitively and independently are exempt from the limit, but virtually none have done so. Banks with under $10 billion in assets are also exempt.

Reform also required that merchants be given at least two choices in the networks that route debit transactions to the bank for processing, typically one controlled by Visa or MasterCard and a competing, independent network that offers advantages such as lower fees, better service or better security.

About NRF
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.