October 13, 2013
STOPPING BANK ROBBERY:
Create Jobs by Ending the Swipe Fee Rip-Off (Doug Kantor, October 13, 2013, RCP)
Posted by Orrin Judd at October 13, 2013 8:38 AMEven though the monthly jobs report went undisclosed last week because of the government shutdown, recent ones from the Labor Department have sent a clear message: If we want to quicken the pace of the economy recovery, we must do more than what we currently are.Here's one idea: Cut the fee that merchants and consumers pay to swipe credit and debit cards.A recent study found that more than 154,000 jobs could be created annually if debit card swipe fees were limited to 12 cents a transaction (as originally proposed by the Federal Reserve) and credit card swipe fees were limited to 24 cents -- amounts that would still allow credit card companies and the banks that issue the cards to realize a healthy profit, given the low cost to process transactions.Banks make money on debit cards even without swipe fees because it's the cheapest way for the banks to give customers access to their money. And the cost to process a credit card transaction is small, only a few cents a swipe. But banks are charging anywhere from 2 to 4 percent of the total bill for credit cards and 24 cents a swipe for debit cards. That amounted to about $50 billion for the banks in 2012 -- or more than $400 for each American family.