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"why they changed the cap."
they changed the cap to hand free $Bs to banks, period.
Except that is disputed, and why they changed the cap. The dispute claims there are other factors involved that those figures don't consider. Hence, the revised number to 24 cents.
"why they changed the cap."
they changed the cap to hand free $Bs to banks, period.
I'm not really sure that we needed a cap on something like swipes. To individual users, 12 cents doesn't really add up, but it does for a bank. I don't necessarily see why we need to set a hard cap. *shrug*
Not a fan of banks, but I don't think allowing 44c swipes causes a great deal of financial stress. Could be wrong of course.
The Federal Reserve is just about to broadcast a limit on interchange fees. The fees are billed to stores by financial ins utions when people use their debit or charge cards. The Fed was legislatively required to cap the fees by this July, though the limit might be greater than the initial estimates given by the central financial ins ution. But it turned out on the contrary. Swipe fee cap by Federal Reserve may be higher than planned. Due to the massive loss of revenues, consumers can expect that many former perks of banking will either disappear or come with far more conditions. Faced with a drop in revenue that the banking industry is used to, the consumer is the party who will end up feeling the pinch.
It does add up. They racked in $2b in those fees last year alone. For sake of argument, let's say the fee would have been half that, that's $1b extra dollars for retailers and (potentially) consumers. Might not be a lot for each person individually, but retailers could use that money to, for example, offer more loss leaders. Which eventually benefit the consumers.
from the article you linked:
It only costs banks about a penny to make the transaction. The banking industry is estimated to take in more than $1 billion per month from swipe fees.
That said, that's the number claimed by the Merchant's attorney. I believe the Fed analysis estimated 8 cents a transaction. The actual value is probably somewhere in between.
Credit Unions will take a hit.
But not for the retailers.
Let the banks charge whatever they want for the swipe fee. Just add it to each person's total at the grocery store. That way I don't have to subsidize people who use the cards when I pay cash and whoever uses the cards for the convenience, extra miles, etc. can pay the cost for that service upfront. Make the costs transparent and if it's worth it, people will still use it.
lol down here its 50cents per eftos/atm transaction, then you have $5 per month account keeping fees...how fkn lame...
the 4 banks down here is in the top10 banks worldwide that has posted a profit this year...fkn lame continue to take consumers for a ride
http://www.americanbanker.com/bankth...1076433-1.htmlFive years ago, Congress decided to take action on the bloated, price-fixed fees that banks charge merchants every time a customer makes a purchase with a debit card. It ordered the Federal Reserve to bring compe ion to the market by lowering fees to a reasonable sum.
Unfortunately, the Fed was swayed by heavy bank lobbying as it wrote the rules to implement the new law, settling on language that allows Visa and MasterCard to keep fees that are way too high. Now, according to a Richmond Fed study released in August, only 10% of 420 retailers surveyed reported that their fees had dropped two years after the law went into effect in October 2011. The other 90% saw no change, were uncertain of the impact or actually faced higher fees.
This clearly goes against congressional intent. The survey offers proof that the Fed made a mistake in appeasing big banks and credit card companies.
In fact, even the least efficient banks are making a 500% profit on the fees they charge merchants to process debit card transactions, according to figures the banks report to the Fed and analyzed by the Merchant Advisory Group, a trade association. Our own analysis of the numbers banks report shows thatabout 90% of banks impacted by the rule (the 100 or so with more than $10 billion in assets) areactually making twice that profit margin. By contrast, retailing is among the least profitable industries as merchants struggle to make margins of 1% to 3%.
Moreover, these are just the margins on the rates regulated by the Fed. Most banks aren’t covered by the regulations — and credit cards aren’t covered at all. So, the real profit margins from so-called swipe fees are actually many times higher than 1,000%.
Nowhere else in our free-market system do such uncompe ive practices flourish. The results are clear: American merchants pay seven or eight times the two- or three-tenths of a percent that European merchants pay in debit and credit card swipe fees. That's because the European Union has vigorously enforced its an rust laws.
Swipe fees have become second-largest operating cost for many merchants, ranking after labor costs but more than rent and utilities. And the fees go up faster than any other cost merchants face.
swipe fees and checking overdraft fees amt to just about ALL bank profits
damn socialists, picking on credit card companies:
http://www.wsj.com/articles/credit-c...ort-1449118860Tougher credit-card rules have helped eliminate at least $16 billion in hidden or unexpected fees charged to consumers, lowering the total cost of borrowing while encouraging healthy growth of the industry, according to a new government report.
Visa and Mastercard and a number of US banks to pay $6.2 Billion to settle an rust charges:
https://www.law.com/newyorklawjourna...st-litigation/The an rust case began in 2005, when about 12 million merchants filed Sherman Act claims in the Eastern District against Visa, Mastercard and their issuing banks, arguing that rules set by card issuers’ networks that impose artificially inflated fees violated the act.
The merchants claimed the credit card companies were being anti-compe ive by imposing the “default interchange fee” that applies to every transaction in the network; the “honor-all-cards” rule that requires all stores to accept all Visa and Mastercards if they accept any of them; and “anti-steering” rules prohibiting merchants from charging different prices depending on the means of payment.
I guess $6.2B is no longer an impressive number, even though it's certain the con was bigger than that.
Apparently, still needs to be approved by the court. What I don't get is why the anti-trust case doesn't continue if there was evidence of potential cartel behavior. Basically, I can understand the companies could settle with the merchants, but why doesn't the federal government picks up the glove and looks into the case and presses further. Well, I suppose I get why.
it's bad for business for the government to punish ripping us off
badmouthing our corporate overlords makes you a commie. Don't be a commie.
https://www.nytimes.com/2023/03/04/o...ange-fees.htmlThe United States now has some of the highest credit card processing costs in the world, typically at 2 percent to 2.25 percent of every purchase. This is eight to nine times as much as the prevailing swipe fee in the European Union. The vast majority of merchants pass these costs on to consumers by charging more for their products — regardless of how one pays.
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