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Court ruling is win for card companies, loss for retailers

  • An appeals court upholds a Federal Reserve-imposed $0.21 cap on debit card swipe fees, reports Bloomberg. Visa (V +2.2%) and Mastercard (MA +0.1%) were in favor of the high rate, but retailers wanted it lower.
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Comments (4)
  • MikeUhas
    , contributor
    Comments (66) | Send Message
     
    The headline says this is a loss for retailers. Had the author done research he would have uncovered facts and truth about this case. The Federal Reserve reduced swipe fees that retailers pay by over 50%. Retailers were paying 46 cents. The Federal Reserve lowered this to 21 cents. Retailers saved billions of dollars. And VISA refunded over 6 billion dollars to Retailers retroactively. Retailers claimed that VISA swipe fees cause higher prices. To date it has never been shown that retailers have lowered their prices commensurate with the reduction in swipe fees. Retailers have benefited from lower swipe fees to the detriment of VISA shareholders, and payment processors, and the customers who buy their goods and services with a VISA card.
    Retailers were prohibited by their Agreements with VISA not to surcharge customers who pay with a credit card to cover the cost of swipe fees. This prohibition was over turned by law and Retailers who complain of paying VISA swipe fees still don't impose a surcharge to recover the swipe fee.
    The Appeals Court decision rightfully recognizes that the federal Courts are not empowered to make monetary policy and regulate banks. Those duties are granted to the Federal Reserve inherent in their charter given by law of the United States of America.
    If Congress wanted swipe fees less than 21 cents; why didn't they pass a law to do so?
    21 Mar 2014, 01:58 PM Reply Like
  • tica2012
    , contributor
    Comments (32) | Send Message
     
    ScotiaBank charges $5 for each swipe in Latin America even though the data on the screen says 500 colones. This would be one US dollar.
    21 Mar 2014, 02:34 PM Reply Like
  • bbrock4
    , contributor
    Comment (1) | Send Message
     
    I'd say that takes some cojones.
    22 Mar 2014, 12:23 PM Reply Like
  • tica2012
    , contributor
    Comments (32) | Send Message
     
    bbrock4 you are sooo right. I am filing a complaint. It appears that foreign banks including CITIBANK are making great profits from this practice which nationals and foreigners seem not to give much attention.
    23 Mar 2014, 11:36 AM Reply Like
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