For the last decade, big banks and the giant credit card networks used hidden swipe fees and fine print to keep consumers and merchants in the dark, costing merchants and consumers nearly $20 billion each year. The U.S. grocery industry is one of the lowest profit margin industries at 0.98 percent, so the impact of swipe fees for food retailers is significant.
“Senator Dick Durbin is a tireless, passionate and committed champion for merchants and consumers,” said Leslie G. Sarasin, president and CEO of Food Marketing Institute. “The odds of beating the big banks were clearly stacked against us, but Senator Durbin left no stone unturned to accomplish these reforms—from his colleagues on the Senate floor to Wall Street analysts to every media outlet and consumer in between.”
Although the Federal Reserve Board cut the anticipated benefit accomplished by the Durbin Amendment in half, there are benefits that merchants and consumers will see on Oct. 1 when the reforms take effect. The Durbin Amendment will:
- Provide transparency so supermarkets can tell consumers about costs and hidden fees;
- Offer a level of certainty to small businesses that there is finally someone watching over debit card fee increases;
- Enhance merchant choice and give a more competitive marketplace for debit card payments, which enhances a merchant’s negotiating power with their payment processors, and could help lower overall payments costs beyond just debit card swipe fees; and
- Allow merchants to give an immediate consumer benefit by protecting discounts for debit and cash.