WASHINGTON — The Federal Reserve is poised to limit the fees that banks can charge retailers for swiping debit cards to 21 cents, a higher cap than initially proposed.
Banks succeeded in convincing the Fed that its initial cap of 12 cents was too low after six-month lobbying blitz. They currently charge retailers an average of 44 cents per swipe.
The Fed will formally adopt the rule Wednesday. It takes effect Oct 1, later than expected.
Banks have warned that they will make up the lost revenue by shifting costs to consumers. Many already eliminated unrestricted free checking accounts, some ended debit card rewards programs, and others are testing annual fees on debit cards.
With the cap higher than some expected, it’s possible the most dire moves won’t happen.