Consumers turned to their debit cards in increasing numbers in 2011, buying$1.82 trillion in stuff with their cards, the Federal Reserve said this week.
According to the report, payment card networks processed 46.7 billion debit card transactions in the United States during 2011, a 24 percent increase in debit card volume and a 27 percent increase in debit card value from 2009.
In the meantime, bank swipe fees, the amount charged per use of debit cards fell in the wake of implementation of the Durbin Amendment, which capped them at 24 cents for the biggest banks. Banks with less than $10 billion in assets are exempt from the rule. In all, swipe fees, also called interchange fees, grew to $20.4 billion in 2011, up from $16.2 billion in 2009.
That’s got retailers riled up, because the report also found the nation’s largest financial institutions took 24 cents for every swipe while it only costs about 5 cents for the transaction. That fell from 50 cents, the Fed noted, in a release that also said it would not revisit the rule.
RILA, a retail trade association said the Fed’s decision to not tackle the issue, when big banks are charging five times the cost, is tantamount to endorsing the gouging of the public by the big banks.
Bill Hughes, senior vice president for government affairs for RILA, said, “The Federal Reserve’s unwillingness to revisit their flawed rules despite this compelling data is astounding and retailers will continue to use all means necessary to ensure the reforms are implemented as the law intended.”