Retail Insiders Second Guess New Debit Card Rules
LAS VEGAS -- Six weeks since the new rules governing debit card transaction fees went into effect, executives at some of the top U.S. retailers are second guessing the move.
Speaking at a financial conference in Las Vegas on Friday, treasurers from McDonald's and Walmart said the cap placed on the swipe fees, as they are also called, are not low enough to have any real impact on retailers, according to a report by Reuters.
"I don't think we gained anything from Durbin," Robert Donovan, U.S. assistant treasurer for McDonald's, said at the ATM, Debit and Prepaid Forum.
Under the Durbin amendment, the Federal Reserve capped debit card processing fees at 21 to 24 cents per transaction. The new limit is roughly half the previous industry average.
However, Donovan raised concerns because most U.S. retailers, including McDonald's, rely on a high volume of small-dollar transactions. As a result of the cap, retailers could actually see an increase in their debit card processing costs because prior debit costs for smaller purchases had lower fees.
Other retailers are expecting to see results on both sides of the fence. Richard Peck, 7-Eleven's senior director of corporate finance, said the company's locations will likely see a mixed impact from the capped fees.
Peck said the Dallas-based c-store chain's processing costs for gasoline purchases will likely drop, but costs will likely rise on inside sales. "It's unclear, overall, whether we will benefit," he said.
But Peck also said the new, largely fixed price will make it easier to project future costs. "We will know with some certainty where our rates will be," he added.