WASHINGTON (12/9/11)--An Electronic Payments Coalition (EPC) research project has found that "there is no evidence that American consumers are benefitting from the Durbin amendment, despite overwhelming evidence that the retail industry is experiencing significant savings," and the EPC is presenting the results of its own consumer study on a new website: wheresmydebitdiscount.com.
The Federal Reserve's final debit interchange rule, which became effective in October, caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents. The regulation also allows card issuers to charge an additional five basis points of the value of the transaction to cover fraud losses. An extra penny may also be charged by financial institutions that are in compliance with the Fed's fraud-prevention standards.
Industry data cited on the EPC website said that retailers have saved $825 million since the interchange cap came into effect, and Bloomberg Government has estimated that retailers will bring in an additional $8 billion in revenues per year as a result of the interchange changes.
The EPC researched standard merchant pricing before and after the Oct. 1 implementation of this interchange fee cap by making 84 separate shopping trips to 21 retail locations of four major national retail brands in six U.S. cities. The EPC said this field research found that customers paid, on average, 1.7% more for the same products after the debit interchange cap was implemented.
While the U.S. Congress justified the interchange fee cap "in part because of proclamations by retailers that consumers would benefit in the form of lower prices," the EPC said its field research has shown that 76% of surveyed retailers have not passed any of the savings created by the debit fee cap on to their shoppers.
The Credit Union National Association (CUNA) and others warned that retailers would not pass on any savings to their customers as the interchange cap legislation made its way through Congress. CUNA is an EPC member.