Banks and the Payment Card Industry have been under intense pressure in relation to the Interchange fees charged when they assist in processing debit card transactions. A bill has now been introduced which could delay the mandatory reduction in fees for up to two years. This article at the Washington Post discusses the proposed bill.
Merchants hate Interchange fees, but love the flexibility in payment options that are provided to their customers. Although the banks and associations make money from Interchange, the complex costs behind handling each other’s transactions off through the card payment networks are not insignificant.
Many banks have started testing new ATM fees in an attempt to keep the transaction business from becoming a loss operation. Industry writers have declared the end of free checking and other banks services as the result of the regulation on debit interchange fees. Although the merchants will no longer need to mark up prices ( somewhere between 1- 3 %) to cover the cost of card transactions, it is apparent that these costs will manifest themselves in other areas for the average consumer.