After legislation to delay the limits was defeated, the issue seemed to be put to bed once the Fed finalized rules in June. The regulator limited fees to on average 24 cents per transaction — more than half what the industry charged prior to the limits, but a major step up from the seven to 12 cent cap it originally proposed.
With the limits days away from becoming a reality, the two sides are entering a new round of accusations and criticism.
At issue this time is a new study that claims that Visa and MasterCard, which process the vast majority of debit card payments, will likely charge the maximum 21-cent fee for purchases of all sizes, as opposed to scaling the fee to the size of the transaction, as they did in the past. For example, the networks used to charge 8 cents on a $2 purchase, but now will scale that up to 23 cents, according to Thomas McCrohan, an analyst at Janney Montgomery Scott LLC.
That claim has retailers and bankers pointing the finger at one another yet again. Retailers blasted the analysis.
“Attempting to charge the public the maximum ceiling amount, no matter how small the transaction is — unfortunately is all too typical of what we’ve come to expect from the card companies and their banks," said Mallory Duncan, chairman of the Merchants Payments Coalition, which led the charge on debit card fees for retailers.
Banking advocates who long argued against government intervention into what they said were free-market practices said the artificial cap is distorting the market.
"Be careful what you wish for when ask Congress to intervene," said one banking lobbyist.