Debit Fee Reform Boosted Consumer Spending, Created Jobs

This seems like a no-brainer: a new economic study found that reducing debit card swipe fees significantly reduces retail prices and creates jobs. Debit card swipe fee reforms last year lowered consumer prices by $5.8 billion, which led to a boost in spending, according to the Merchants Payment Coalition study. Notably, U.S. debit card reforms also saved merchants $2.6 billion and created 37,000 new jobs. Still, the doomsday study said, retailers and consumers could have benefitted even more if fees had been slashed to 12 cents – which was originally recommended by the Federal Reserve – instead of the current rate of 21 cents plus five basis points of the transaction value. Further, if swipe fees for all credit card transactions had been held to the same level as debit fees in 2012, retailers would have saved another $6.9 billion and created more than 98,000 jobs last year. “The study…reinforces that more needs to be done to correct the mistakes of the Federal Reserve on debit fees and to curtail the excessive credit card fees that burden America's consumers and merchants.  It is truly unfair that American swipe fees are the highest in the industrialized world and eight times higher than in Europe,” NGA President and CEO Peter Larkin said in a statement. For more, see: This Supermarket News article This NGA statement Related articles: Swipe-Fee Settlement Objections Get One Last Day in Court Fed to Retailers: No, We’re Not Cutting Debit Interchange Until the Supreme Court Says We Have to