May 13, 2011
A year after swipe fee reform was adopted by the Senate, merchants and consumers across the country are fighting to ensure that those meaningful reforms will be implemented this summer. Swipe fee reforms will lower costs for Main Street merchants and lower prices for American consumers.
“We’ll keep fighting the good fight until swipe fee reforms go into effect and small retailers and their customers see the savings,” said Lyle Beckwith, Senior Vice President of Government Relations at the National Association of Convenience Stores. “Wall Street might have the money and influence on their side, but we have the facts on ours. The facts say that swipe fee reform is good for small business, good for consumers, and even good for small banks. And I am confident that Congress will listen to the facts.”
The swipe fee reform amendment was adopted by the Senate by a bipartisan 64 to 33 vote. By passing these reforms, the Senate struck a blow against a fixed fee that is the highest in the world. Across the world, 7 of the 8 countries with highest per capita debit card usage have a swipe fee rate of zero.
For many American retailers, swipe fees are the second highest operation cost after labor—and are rising faster than any other business expense, including healthcare. Consumers, too, shoulder this ever-increasing burden, since a portion of the swipe fee is incorporated into the price of goods of services.
While Main Street celebrates the reform and awaits its imminent implementation, the big banks and their lobbyists are spending huge amounts of money and resources to make sure that retailers and their customers never see the much-needed savings.
As some of the country’s most influential consumer groups have entered the ring in support of swipe fee reforms, the biggest banks continue to broadcast misinformation and misleading claims about swipe fees in an effort to undermine Main Street merchants and customers.
Despite numerous confirmations from industry analysts and from the Hill that the small bank exemption will function as the legislation intended, Wall Street has stayed committed to its flawed talking point about the small bank exemption.
Federal Reserve Chairman Bernanke confirmed that the rule would follow the intent of the law: “At the Federal Reserve we are quite aware that the Congress in writing this law intended for small issuers to be exempted.” Senator Durbin has taken multiple opportunities to ask the banks to cease their use of misinformation and allow the Federal Reserve to publish its final rule without interference.
“We’re in the business of customer service,” said Rob Bartels, CEO of Martin’s Super Markets in South Bend, Indiana. “That means passing savings along to our customers regardless of the bank they use. My customers are as eager to see swipe fee reforms implemented as I am.”
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