Biden Administration Targets Excessive Swipe Fees

Recently, the U.S. Justice Department’s Antitrust Division and the Federal Trade Commission (FTC) endorsed a May proposal by the Federal Reserve to strengthen the 2011 debit card interchange fee rules (Regulation II) to reign in the rapidly growing “card-not-present” (CNP) transactions such as online shopping, automatic bill payments and new payment methods such as Apple Pay.

The Merchants Payments Coalition (MPC) submitted comments earlier in the month urging the Fed to update Regulation II to ensure that two unaffiliated networks must be available for all debit transactions including CNP transactions.

MPC also requested that the Fed further clarify that access to competitive debit networks must be enabled regardless of what kind of authentication – such as signature, PIN, PINless or biometrics – is used.

MPC urged the Fed to reduce the current regulated debit card fee rate that sits at $.21 plus .05 percent of the transaction, plus 1 cent for fraud. MPC’s comments build upon the North Dakota Retail Association and the North Dakota Petroleum Marketers Association’s lawsuit filed in April arguing that the Fed failed to follow the Dodd-Frank law which called for the fees to be “reasonable and proportional” to the cost incurred by the issuer.

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