The saga of merchant interchange rate regulation took another interesting turn last week, when an appellate court reversed a decision from July regarding rules governing fees banks collect with every debit card swipe.
First a quick history. In 2011, the Federal Reserve ruled that debit card swipe fees were to be limited to 21 cents per transaction. In July 2013, a U.S. district court sided with a group of retailers and deemed the cap needed to be lowered. On Friday, that ruling was overturned.
According to an article from Reuters, the decision by the three-member panel U.S. Court of Appeals for the District of Columbia ruled that the Durbin Amendment's ambiguity gave banks the ability to set a higher cap.
A statement from the panel said that agencies and courts alike do not have the authority to disregard what is written in "poorly drafted" legislation. Because of this, the court must discern Congress's intent.
While banks were happy with this development, merchants were not.
"To have fees that continue to be so unreasonable in the debit card space is detrimental to the folks that we represent as well as ultimately their customers," Liz Garner, director of commerce and entrepreneurship at the National Retail Federation, told the news source.
This debate is far from over, as retailers are still up in arms over this ruling and remain outspoken about the challenges that come from these swipe fees. Perhaps the best course of action for businesses to take in the immediate future is to start looking for more intelligent merchant rates and get a customized interchange rate quote.