Shares in major US issuing banks and card schemes moved up late Tuesday as the Federal Reserve issued a watered-down take on the Durbin Amendment on interchange fees, setting the cap at 21 cents per transaction, rather than the 12 cent ceiling proposed in earlier consultations.
The Federal Reserve reacted in the most responsible way they could to what is considered by most to be a “draconian” measure that is at most a knee jerk reaction by congressional leaders to any banking measure. Not to mention those pandering to the retail
Anyone that believes merchants will pass the interchange savings provided by the Durbin Amendment to consumers is living in la la land. As equally naïve for anyone to believe that financial institutions would not be force to look at the product's income,
the expense and risk and implement fees that would make it profitable. So it really would be refreshing for Matthew Shay of the NRF to get off his soap box and credit the American consumer a little common sense.
That said, let me remind everyone that merchants praised the day that electronic transactions became the payment of choice…it is the least expensive method of payment and I truly hope that consumers now decide to write checks to the Wal-Marts and Targets
and let them process those items which cost them 5 times more than an electronic transaction and have 100 times more losses in rejects.
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