New York City Vermont has become the first state to pass legislation limiting the swipe fee on credit- and debit-card purchases. The move came last Friday, a week after the Senate approved a similar provision as part of the mammoth financial overhaul bill.
The Vermont law targets the fee retailers must pay card issuers and processors each time shoppers swipe a credit- or debit card, which typically ranges from 1% to 2% of the price of the purchase.
The law allows retailers to set a $10 minimum for credit- and debit-card charges and to offer a discount to shoppers who pay with cash starting Jan. 1.
The Vermont law is the second big win for retailers this month on what has long been one of their top political issues. Last week, the Senate approved an amendment sponsored by Sen. Richard J. Durbin (D-Ill.) that included similar provisions. In addition, it directed the Federal Reserve to ensure that the fees are "reasonable and proportional" to the costs incurred by the network that processes the card, typically Visa or MasterCard. The Senate passed the financial overhaul bill that includes the amendment Thursday, and now it must be reconciled with a version passed by the House in December that does not address swipe fees.