The Federal Reserve on Wednesday issued its long-awaited rule on the cap on “swipe” fees that banks charge retailers for processing debit card purchases. And it appears that all the banks’ complaints about the proposed cap paid off.

The Fed had originally proposed limiting the fees to 12 cents a transaction, a steep drop from the current average swipe fee of about 44 cents. But the Fed said Wednesday that it would set the base cap at 21 cents. Plus, banks can add extra cents, based on the amount of the transaction, to cover fraud costs.

David French, senior vice president of government relations at the National Retail Federation, said the rule was “a lot closer to what the banks would have received if they’d written the rules themselves.” He predicted that “consumers will benefit, but not as much as Congress intended.”

The Retail Industry Leaders Association quickly criticized the new rule as an “about face” from the Fed’s earlier proposal. “The announcement today from the Federal Reserve is a disappointment to merchants and consumers who face unfair and excessive fees imposed by big banks and credit card companies,” Sandy Kennedy, the association’s president, said in a prepared statement.

The real question, as we here at Bucks have said before, is whether consumers will actually see any savings from lower swipe fees. Consumers have been skeptical that they’ll benefit at the cash register. Perhaps the best that shoppers can hope for is that retailers’ costs won’t go up as quickly as they might have without the cap — although it may be impossible to truly know if that occurs.

Banks have until Oct. 1 to comply with the new rules.

Do you think the base cap of 21 cents goes far enough?

Article source: http://feeds.nytimes.com/click.phdo?i=0d61447aa3715b73103525092e9c10ce