Digital News Report – The Federal Reserve Board announced the final rule for the Debit Card Interchange Fees and Routing, which will limit the amount charged for a debit fee transaction. The new debit-card fee-cap for merchants will begin on October 1, 2011.
The new rule limits the debit card issuer to receive no more than 21 cents per transaction with 5-basis points multiplied by the sales total. Therefore, if the person purchased $38 of merchandise with their debit card, the fee to the merchant would be 24 cents on average.
However, not all debit card issuers may have to comply with the new rule. The Federal Reserve said that if the issuer, along with their affiliates, have assets totaling less than $10 billion, they will be exempt from this debit card interchange fee requirements. The Federal Reserve board said they will be publishing a list of those that must follow the new rules and those that are exempt.
Federal Reserve, Vice Chair, Janet L. Yellen said in a statement that the “Board staff projects that U.S. debit card volume may exceed 50 billion transactions this year, and recent annual growth continues to be at double-digit rates.”
By: Tim Edwards