On Wednesday, Senator Richard Durbin of the United States Democrat Party said that he intends to pass a critical Wall Street reform bill through the Senate that is will aim at reducing the fees being incurred by merchants who accept credit and debit cards.
All merchants, including those running convenience stores and supermarkets are being charged high interchangeable fees by the banks for every transaction made by consumers using their credit and debit cards. The interchangeable fees which stood at $42 billion in 2007, increased to $48 billion in the year 2008.
Addressing the various people present in the Senate, Richard Durbin said, "We're going to have a bill that addresses the interchange fee and try to bring some fairness to it. This is one of the major concerns of retailers and businesses."
He also added "We're not saying there shouldn't be an interchange fee. We're saying it should be reasonable."
A large chunk of the revenue made by the credit card companies is through the interchangeable fees they charge merchants. For companies like Mastercard Inc and Visa Inc this has been a concern that is ongoing for a long time now.
A number of bills intended to regular the interchangeable fees have seen their end on the Senate floor due to poor support and backing by various senators. However, Durbin has ensured the revival of the reform bill and intensified his efforts to push it successfully through the Senate. The proof of his efforts are the three amendments he has made to the bill in order to reform it.
Eric Grover, an ex-employee of Visa and a payments consultant, has said "It's highly unlikely that the card acceptance fee or interchange regulation will move in this environment on its own. However, there's a vehicle here - the (regulatory reform) bill - and the golden opportunity for advocates of regulation is, attach to that vehicle."
Among the various proposals made by Durbin, one of them would allow merchants to offer discounts to their customers who use a particular type of credit card in comparison to the other. This reform would also allow merchants to give discounts to customers who pay either by cash or any other mode of pay excluding credit cards. The amendment would also allow merchants to set minimum limits for purchase using credit cards.
Grover said that if Durbin's amendments to the broader bill are a success, there would be very few lawmakers who may vote against it.