It’s been four years since the Federal Reserve began implementing reform of the market for debit-cards, and instead of the disaster the banks keep predicting, it turns out that bringing competition to a rigged market is always good for consumers and the economy.

This is a business completely dominated by the two big card companies, Visa and MasterCard, which price-fix the fees their member banks charge merchants to process the transaction every time a customer swipes a debit card to pay for something. It is the complete antithesis of the competitive free-market system that made our economy the largest in the world.

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For years, the banks kept turning up the fees for what had once been a free service, and soon merchants found themselves groaning under these debit-card swipe fees (and fees for credit cards too.) These bloated fees together have now swollen up so much and so fast that they are now many merchants’ second-largest operating cost, behind only labor.

With tiny profit margins, especially compared to the banks, merchants have to raise prices to cover at least part of the cost of swipe fees. That means everybody, even people who don’t use cards – and especially the poor – pay higher prices for everything from haircuts to groceries.

Congress intended debit reform – the Durbin Amendment – to bring this bonanza for the banks, this walled-off section of our economy, into the free-market system under which the rest of our economy operates.

And it worked. Debit reform saved consumers $6 billion and supported 37,500 jobs in its first year alone, the prominent economist Robert J. Shapiro found.

Congress also made sure to exempt smaller institutions like credit unions and community banks, which gives them an advantage since they can still charge the old, higher fees, and which makes their opposition to reform inexplicable. Reform applies only to financial institution with $10 billion or more in assets – about 100 altogether.

It would be nice to say reform made debit card swipe fees completely fair, but unfortunately it didn’t turn out that way.

After heavy bank lobbying, the Federal Reserve let the banks charge about 25 cents per transaction, more than twice the amount it had originally considered.

That means banks still rack up an outrageous profit margin on each transaction – 500 percent or more – according to the figures the banks themselves report to the Federal Reserve.

That is far higher than in Europe, where the European Union has aggressively promoted competition, and debit- and credit-card swipe fees are seven or eight times lower than in the U.S.

Had the Federal Reserve not buckled under bank pressure and instead completely opened debit cards to competition, consumers would have saved another $3 billion that first year, according to the economist, Mr. Shapiro, and supported another 18,000 jobs.

Small businesses wouldn’t still be groaning under the unfair and onerous burden of these outrageously high fees, consumers would be paying less at the cash register and even our economy would be more sprightly, since retailing is such a huge piece of it.

That’s why we merchants continue to exhort the Federal Reserve to do exactly what Congress intended – and not what the banks would prefer – in fully implementing reform. And why, four years since the Fed disclosed its new rules, it’s time to remember that debit reform is still a half-finished job.

That doesn’t even take into account credit cards, whose profit margins can run to a gargantuan 10,000 percent.

The Fed is supposed to periodically review its rules for debit reform, and it needs to tighten them at the next opportunity.

Meanwhile we must start considering fixing the rest of the swipe fee market by making credit-card fees competitive, too.

Beckwith is senior vice president for Government Affairs at the National Association of Convenience Stores.