Hidden swipe fees are about to take a dive and banking lobbyists are not going down without a fight. Banks and credit card companies claim that they will be unable to give debit cards to their customers because the fees collected provide them with the means necessary to supply the cards in the first place. If hidden swipe fees are eliminated, these industries will suffer tremendously. Or, at least they seem to think so. Merchants, on the other hand, differ in opinion.
Despite the adamant opposition being made by financial institutions and credit card companies to the changes in legislature, merchants find themselves feeling a sense of relief. In July 2010, businesses learned that the fees associated with their running of credit and debit cards will be reduced significantly. This was just what these individuals wanted to hear in hard economic times. Fewer fees equal more money in their bank accounts. More money equals better opportunities.
It’s not a far stretch to see why these changes are at the height of many heated discussions. When the banking lobbyists tried to make their move in July to change things, Congress would not budge an inch. The fees will be set to change as early as April 2011. Merchants will soon rejoice over their victory.
Even with an April deadline, card companies and banks are hoping for the fee reductions to be revoked or, at least delayed. It seems to me that they want to buy time so that they can try to change some minds in Congress. Only time will tell whether or not they are successful in their attempt. It does not appear that things are in their favor. Perhaps that is explains why, these institutions continue to grasp at straws by soliciting help from some political allies.
With guns a’blazing, the banks and credit card companies have hired big names to represent them. According to the New York Times, former advisors to Representative John A. Boehner and Representative Steny H. Hoyer are onboard.
The retailers have some heavyweights of their own lined up in their corner of the ring. Senator Don Nickles of Oklahoma along with the former chief of staff for Christopher J. Dodd, who is the head sponsor of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 has also agreed to participate and be supportive. The teams being assembled are sure to get some attention.
All of the effort is in vain, however, because it does not look like the fee reductions will be changed anytime soon. No matter how much they oppose the new legislature, the ball has been set in motion. The banks are losing the battle. The Fed just have not been able to accept it for what it’s worth. If the companies in question are unable to charge fees to earn a profit, they may go to extremes.
This poses a whole new set of questions. In fact, banking customers are left wondering if the banks and card companies will invent new kinds of fees to charge to make up for the losses that they will incur from the lack of hidden swipe fees. If they can’t stick it to the merchants, cardholders are the next best thing.