Delaying Debit Card Swipe Fee Reform Will Hurt Consumers: FMI
The Food Marketing Institute (FMI) said that any delay in implementing debit card interchange fee reform will negatively impact consumers and benefit the banks who set the non-negotiable rates for retailers.
U.S. Congresswoman Shelley Moore Capito (R-WV) introduced legislation late yesterday that would delay implementation of rules that would set reasonable and proportional constraints on the amount banks can charge retailers for processing debit card payments.
“We are greatly disappointed that lawmakers want to delay the process for making the debit card interchange fee system more transparent,” said Leslie G. Sarasin, president and CEO at FMI. “Neighborhood grocery stores and more importantly, their customers, deserve relief from these unfair practices.”
Last year Congress included a provision in the Dodd-Frank financial reform act that would cap debit card interchange fees at 12 cents per transaction, a decrease from the average 44 cents per transaction that banks currently charge. The Federal Reserve is expected to finalize its proposed rules for implementing the provision in April.
“Supermarkets operate on a 1.5 percent margin and if lawmakers have difficulty understanding why it’s wrong for the bank to make more on the transaction than the merchant, we have grocers who will happily show them the challenges of operating a business and hiring new associates when you must deal with those kinds of business costs,” she said.
FMI is a founding member of the Merchants Payments Coalition (MPC), a group of nearly 100 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, online merchants and other businesses that accept debit and credit cards. FMI serves as the chairman of the legislative subcommittee of the MPC. FMI and the coalition have been fighting for more than 5 years for a more competitive and transparent card system. The coalition’s member associations collectively represent some 2.7 million stores with about 50 million employees.
Arlington, Va.-based Food Marketing Institute (FMI) conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies, which include food retailers and wholesalers — in the United States and around the world. FMI’s U.S. members operate approximately 26,000 retail food stores and 14,000 pharmacies.