Big banks have been doing a lot of complaining lately about new federal rules limiting how much they can charge retailers every time a consumer buys something with a credit card. The rules, imposed by the Federal Reserve, cut debit fees in half to about 22 cents per swipe.
In response, the banks have been throwing a major tizzy fit. They spent over $30 million a month on lobbying, much of it to overturn the debit rules, as we reported. To make up for revenue lost to the cap, Bank of America tried charging its customers $5 a month for debit card purchases. The move was so unpopular that it attracted scorn from President Obama, and helped catalyze Bank Transfer Day on Nov. 5, when at least tens of thousands of people removed their money from large banks.
In the midst of all this controversy comes a little piece of irony: Banks still make money from debit cards, even after the new fee cap. “Even with reduced revenues, debit still drives profits,” according to a paraphrasing comments by Scott Qualls, a vice president with BB&T Corp., a bank holding company, by American Banker magazine.
Qualls spoke last week at American Banker’s ATM, Debit & Prepaid Forum in Las Vegas. The rest of the article focused on ways bankers can keep debit profitable, including charging fees for debit accounts that also offer rewards programs.
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