By Vicki Needham - 06/09/11 09:25 PM EDT
In addition, rewards credit cards will gain market share as rewards debit cards become a thing of the past.
Small banks’ unregulated interchange fees will allow them to offer more competitive products, which will gradually increase their market share. This will increase the proportion of unregulated interchange fees that merchants have to pay, Papadimitriou said.
The Federal Reserve is expected to cap fees at 12 cents per transaction when it unveils its rule by July 21, compared with an average 44 cents per transaction that results in about $1.3 billion a month in revenue for banks.
"Although the Durbin amendment will decrease the amount that large banks can charge in interchange fees, loopholes within the legislation will significantly diminish its impact for both merchants and banks over time," the report said.
Sen. Dick DurbinDick DurbinClinton ally stands between Sanders and chairmanship dream Reid backs House Puerto Rico bill McConnell pledges redo vote on Zika after break MORE (D-Ill.) proposed the amendment that is included in the Dodd-Frank regulatory overhaul law and has been in a heated battle for nearly a year that between retailers who support the plan and banks that oppose the change.
While the bill puts restrictions on how much banks like Chase and Bank of America can charge merchants for processing debit card transactions, it does not put restrictions on how much debit card networks like VISA and MasterCard can charge merchants.
The amendment also exempts prepaid cards and all banks and credit unions with less than $10 billion in assets.
An amendment sponsored by Sen. Jon TesterJon TesterBernie Sanders’s awkward return to the Senate Senators roll out bipartisan gun proposal Congress should stop government hacking and protect the Fourth Amendment MORE (D-Mont.) that would have delayed regulations on debit-card fees for 12 months, fell six votes short of the 60 it needed to win passage, 54-45 on Wednesday.