Meanwhile, the reform ignores the real anti-trust problem that is raising consumer prices, credit card interchange.
The companies will also allow businesses to reject credit cards with higher interchange fees, like Platinum cards, Signature cards, and other rewards cards.
Last week, the Senate passed an amendment sponsored by Senator Dick Durbin (D-Ill.) that could reduce interchange fees that credit card processors charge to merchants and allow stores to give customers discounts for paying with cash, check or debit cards.
FORBES: Senate Amendments Could Be Major Setbacks for Credit Card Issuers
More than two-thirds of the 27 million small businesses in the U.S. currently do not accept credit or debit cards, in large part because of the expensive interchange fees associated with payment processing, cumbersome application process and required credit checks.
First, credit cards are not covered under the interchange fee regulations that went into effect on October 1.
FORBES: Will Debit Fees Push Consumers Back To Credit Cards?
American Express, as well as Visa and MasterCard, are expectant of Federal Reserve regulation on credit card transactions which could limit their interchange fee, or their capacity to charge different fees to different vendors.
When a customer uses a credit card, the retailer is charged an interchange or swipe fee.
Such reactionary moves will combine to make debit cards relatively less appealing to consumers and will, in effect, promote a more pervasive use of credit cards which have significantly higher, unregulated interchange fees.
Credit unions would be especially vulnerable to the loss of interchange fee revenue: about half say that they will reduce or eliminate free checking and rewards debit cards, and almost 9% say they will consider reducing their staff.
In late June, the Federal Reserve issued its final regulations on debit interchange fees, handing both large banks and smaller credit unions a victory.
The total service fees that Bank of America earns from its debit and credit card business was relatively stable prior to 2009 aided by high interchange fees and card fees in the US relative to the rest of the world, which helped generate strong revenues for the card industry.
FORBES: Bank Of America Bleeds Card Fee Income, Stock Should Still Be $16
Federal Reserve Chairman Ben Bernanke has proposed a 12-cent per transaction cap on debit interchange fees, down from an average of 44 cents, for all but the smallest banks and credit unions.
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