New Federal Reserve Board rules that on Oct. 1 will reduce debit card interchange revenue for larger issuers may cause banks to raise fees associated with using debit cards, and that could drive consumers to use credit cards more, a new research paper from the Federal Reserve Bank of Boston contends.
Merchants could end up paying 24 cents — the maximum fee allowed — on a $2 purchase, three-times as much as the 8 cents they would pay under the current system, according to a note to investors by Janney Montgomery Scott LLC analyst Thomas McCrohan that was reported by Bloomberg News.
Visa, MasterCard reportedly planning to hike merchant cost for small purchases on debit cards (#swipefees)September 22, 2011
Visa Inc. and MasterCard Inc. are reportedly planning to dramatically raise the fee charged to merchants for small ticket items, according to Janney Capital Markets analyst Thomas McCrohan
The US lender has joined the ranks of other rivals and is to charge a fee of $3 per month for debit card users in five US states from October on.