Washington D.C. – The National Grocers Association (NGA) today applauds the Federal Reserve Board’s proposal to lower swipe fees on debit card purchases, but is strongly urging that the final number be set even lower.
Acting on powers granted under the 2010 Durbin Amendment, the Fed’s Board of Governors proposes to lower the debit interchange cap from 21 cents per transaction to 14.4 cents per transaction, while increasing the amount for fraud prevention to 1.3 cents and lowering the amount for fraud loss recovery to .04%.
“This long-overdue announcement by the Fed is a welcome move in the right direction, but it doesn’t go far enough to help American consumers and businesses who paid $34.4 billion in swipe fees last year,” said Greg Ferrara, NGA President & CEO. “The Durbin amendment directed the Fed to set a cap that’s both “reasonable and proportional, and 14.4 cents per transaction is neither. These ‘swipe fees’ have a direct impact on independent community grocers’ operations and the viability of their businesses. Reducing the costs of these fees would provide grocers with savings to pass on to their customers and create opportunities for reinvesting in their stores, expanding their workforce, and boosting local economies.”
Surveys conducted by the Fed show that bank costs have fallen consistently since the 21-cent fees have been in effect, and while banks enjoyed the extra profit, the average U.S. family is paying $1,000 each year for the privilege of using debit cards.
The National Grocers Association is calling on the Fed to bring swipe fees back into line with economic reality, and save consumers from a silent tax that hurts everyone but the banks.