Alexandria, Va. The Retail Industry Leaders Association (RILA) and the National Association of Convenience Stores (NACS) praised the U.S. Senate’s vote on Thursday to support the financial reform package known as the Dodd-Frank Bill. The legislation contains provisions to ensure that debit card interchange fees are reasonable and proportional to the processing costs incurred.
"For years retailers, small and large, have fought to bring attention to the excessive fees and anti-competitive practices of credit card companies and big banks,” said Sandy Kennedy, president, RILA, in a statement. Despite their efforts, little changed and year after year America's retailers faced higher fees and card acceptance rules that became increasingly anti-competitive.
“The reforms contained within financial regulatory reform legislation focus narrowly on large Wall Street financial institutions at that heart of the problem. Swipe fee reforms will benefit retailers and their customers while excluding community banks and credit unions from the new rules,” Kennedy said.
Swipe fees have been the convenience and petroleum retailing industry's top pain point and second largest expense item -- behind only labor costs -- for a number of years.
"Today's vote demonstrates the value of retailers engaging with their elected officials," said NACS president and CEO Hank Armour.
The legislation includes a provision directing the Federal Reserve to issue rules preventing card networks from requiring that their debit cards can only be used on one debit card network -- ensuring that retailers will have the choice of at least two networks upon which to run debit transactions. In addition, the amendment would allow merchants to choose to decline credit cards for small dollar purchases because swipe fees often exceed profits on such sales. The amendment also clarifies that retailers can offer discounts to consumers who choose to pay with cash, check or debit card.