Payment processing networks Visa, Pulse, Star, Shazam and CU-24, which altogether handle 80 percent of all debit card purchases made in the U.S. every year, say they will allow small banks – those with less than $10 billion in assets – to receive more money from these transactions than their larger competitors, according to a report from industry publication the Convenience Store Petroleum Daily News. As a result, most other networks are expected to do the same.
“Throughout the debate over how to responsibly rein in out-of-control swipe fees, the big banks and credit-card companies have sought to scare small banks and credit unions into thinking interchange reform would hurt them,” U.S. Rep. Peter Welch of Vermont told the news source. “This news confirms what we’ve known all along: that this legislation will help, not hurt, small banks and credit unions in Vermont and throughout the country.”
Originally, it was believed that if large and small banks were treated equally by credit networks, the financial giants would be able to offer customers better deals and perhaps hurt business for local institutions, the report said. Wording in the Durbin Amendment to the Dodd-Frank Consumer Protection Act made some in the industry unsure if the networks would institute these changes.
Debit card swipe fees will likely be overhauled significantly later this year, if and when, a Federal Reserve Board proposal to limit them to just 13 cents per transaction is approved.