Will Check Writing Increase as a Result of Debit Card Usage Fee?
Everyone in the industry knew this was coming…debit card usage fees, and the slow demise of free checking!
Starting October 1st, 2011 debit card interchange fees were capped by the Federal Government as a result of Section 1075 (Durbin amendment) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Banks will lose 45% of the $20.5 million paid by retailers to accept debit cards. To make up this loss in revenue, many banks like Bank of America are now charging customers a debit card usage fee. Bank of America charges it’s customers $5/month to use their debit card to make purchases.
There has been public outrage over Bank of America’s decision with bashing from the President to TV anchors cutting up their BofA debit cards on live television. Even some of our own merchants who benefit from the Durbin amendment are upset about debit card usage fees. They are consumers too!
Consumers are likely to quit using their debit cards to avoid the usage fee-will this cause an increase in check writing? I am thinking it might! There are many consumers who dislike using credit cards and prefer to make purchases straight from their checking accounts. Without the convenience of swiping a debit card retailers will most likely see an increase in check payments.
For more information on the Durbin amendment or to learn more about PaymentMax visit www.paymentmax.com
Posted on October 4, 2011, in Dodd-Frank and Debit Interchange Caps, merchant account and tagged accepting checks, bank fees, bank of america, check writing to increase, debit card usage fees, debit cards, dodd-frank wall street reform and consumer protection act, durbin amendment, paymentmax, Section 1075. Bookmark the permalink. Comments Off.