Last week a Federal Appeals court reversed a lower courts decision to completely remove interchange fees or "swipe fees". Swipe fees are what merchants pay out to banks or major networks such as MasterCard & Visa. The idea behind the fee was to re-imburse banks for issuing debit cards.
Before congress got involved the interchange fee was 44 cents "per swipe." Law makers, along with the National Retail Foundation argued that the fees per transaction were too high, so in 2011 the federal government limited interchange fees to 21 cents on the transaction.
In July of 2013 a United States District Court on behalf of the National Retail Foundation determined the 21 cent fee should be decreased further, arguing that with lower fees comes a lower overall cost of goods for consumers. They requested the fee to be limited to the cost of issuing cards. However, the federal appeals court decided that other costs such as processing and fraud monitoring must be considered.
So it has been decided that with these additional factors, the 21 cent fee will remain. Banks ofcourse applauded the court's decision to keep interchange, stating: "Reasonable minds have prevailed in vacating the disctrict courts ruling to affirm the exisitng rule".
BUT HOW DOES THIS EFFECT THE ATM INDUSTRY?
Chances are the smaller "mom and pop shops" and gas stations accept cards at the counter, asking their customers to select either debit or credit. These vendors are looking to save as much money as possible. So why pay interchange when an ATM doesn't charge the owner at all? Having an ATM in a location is the ultimate solution to debit interchange fees.
As long as banks charge merchants and retailers, there will always be a need to accept cards for little to no charge. Having an ATM allows customers to withdraw cash at the location, while the business owner has a steady flow of cash coming in. The ATM can benefit your business, as well as your customers business. So spread the word and help out those business owners!