According to The Wall Street Journal, banks are planning to introduce new fees on basic products like debit cards, ATMs and checking accounts in attempt to recoup revenue lost as a result of regulatory changes.
The Fed has proposed capping debit-card merchant fees, known as interchange. I’ve been concerned about the unintended consequences for small businesses and community banks. The proposed caps on debit Interchange fees will increase the cost of debit cards for consumers and potentially curtail debit card use (resulting in either lower sales volume or use of higher cost card types). On the drawing board are annual debit card fees of $25 or $30 and limits on the number of debit-card transactions that a customer can make each month or limiting the size of a purchase that a customer could make with a debit card.
When consumers are charged to use debit cards, will they still favor them?