Last week, the National Retail Federation launched a nationwide 60-day lobbying, grassroots and media campaign advocating that a new federal law lowering “swipe” fees banks charge to process debit card transactions takes effect in late July as scheduled.
A provision in last year’s Wall Street reform bill will reduce the fees by an estimated 70 percent, saving about $14 billion a year that retailers plan to pass along to their customers through discounts or other benefits. The credit card industry is working to delay the reform.
“Congress concluded last year that swipe fees have been driving up prices for consumers by far too much for far too long,” NRF president and CEO Matthew Shay said. “Now that Congress has done something about these fees, retailers are standing by to pass the savings along to their customers through lower prices and higher value. Our job over the next two months is to ensure that swipe fee reform takes effect as planned, and consumers get to enjoy all the new benefits.”
NRF’s multi-pronged campaign will include:
- An intensive grassroots campaign mobilizing retailers from across the country through NRF's members, members of its National Council of Chain Restaurants (NCCR) division, and state retail associations;
- A June fly-in with hundreds of business owners in Washington to meet with members of Congress and urge that the reforms go through as planned;
- An aggressive media relations campaign including media briefings and interviews with national and local news outlets, and nationwide placement of op-eds and letters to the editor;
- A nationwide print and radio advertising campaign including inside-the-beltway print and radio ads and hundreds of thousands of dollars in radio ads in key markets nationwide;
- Leveraging social media and viral video to educate legislators and the public; and
- Providing a platform for merchants and consumers to get involved through a new web resource center (www.nrf.com/swipefees).
Swipe fees, officially known as interchange fees, are a charge averaging 1-2 percent for debit cards and 2-3 percent for credit cards taken by banks each time a card is used to pay for a purchase. The fees have tripled over the past decade to about $50 billion a year, and drive up prices paid by consumers by an estimated $427 for the average household. Debit cards account for about $20 billion of the total.
Congress has yet to deal with credit card swipe fees. But a provision in last year’s Wall Street reform bill will reduce debit card swipe fees by an estimated 70 percent, saving about $14 billion a year that retailers plan to pass along to their customers through discounts or other benefits. Reform is scheduled to take effect July 21, but the banking industry is pushing legislation that would delay implementation by as long as two years, and has spent tens of millions of dollars on a massive misinformation campaign.
Regulations proposed by the Federal Reserve to implement last year’s swipe fee law would lower debit card swipe fees from their current level of 1 to 2 percent of each transaction to a flat fee of no more than 12 cents per transaction for large banks that adhere to fee schedules set by the card companies. Banks that set their own rates would be free to charge any fee they believe the market would bear provide that they do so independently. Financial institutions with less than $10 billion in assets are exempt.