NACS is urging retailers to call their Senators in one final push before the 2p.m. EST vote.
Today, June 8, at 2 p.m. EST, the Senate is set to vote on an amendment by Senator Jon Tester (D-MT), which seeks to delay and effectively kill swipe fee reform.
The debate ( happening now) and the vote can be watched live on C-SPAN. Some 40 votes are needed to protect swipe fee reform.
NACS has announced a final push to get the word out to Senators and is urging retailers to call their Senators and urge them to vote “No” on Tester’s amendment. Retailers also can go to swipefeesletter.com and send a letter to their senators asking for a “No” vote on the amendment.
“The Tester amendment is neither a compromise nor a study — and it is not a six-month delay that its supporters are touting. The amendment is damaging — it unravels our efforts to implement much-needed debit card swipe fee reforms because it will stop and repeal the current rulemaking, and potentially all a wide range of non-debit card related costs incurred by banks, Visa and MasterCard to be recovered through interchange,” NACS reported.
The final rule on debit card swipe fees, as required in the Durbin amendment, is set to be implemented on July 21. The final rule should be released any day.
The Tester amendment aims to suspend and repeal the Federal Reserve’s rule on swipe fees. During the “study” time called for in Tester’s amendment, U.S. consumers and businesses are expected to lose $1 billion per month (over $12 billion total) and 95,000 new jobs, NACS noted. Interchange fees are the second highest operating cost for most merchants — only labor is higher.
The Federal Reserve found that although a debit transaction costs only four cents to process, merchants are charged on average 44 cents every time a customer swipes a debit card. The Federal Reserve proposed capping interchange fees at 12 cents, a 200% profit on every transaction. These numbers are likely to change in whatever final rule the Fed issues, underscoring why Congress should withhold judgment until final rules are issued.
Under the Durbin amendment the Federal Reserve is directed to exempt small banks, credit unions and thrifts under $10 billion in assets — which is 99% of all banks.
The U.S. has the highest swipe fees in the world and the system needs reform. Seven of the eight countries in the world with the highest per capita debit card usage have no swipe fees at all. In addition, in Europe Visa and MasterCard voluntarily agreed to lower debit swipe fee rates than the Federal Reserve proposed for the U.S.