Nov. 11, 2010
Recent meetings between Federal Reserve staff members, consumer groups, and payments executives show just how divergent the views are as the Fed prepares the first-ever regulations on U.S. payment card interchange. Consumer groups are pushing for “at-par” debit card interchange—essentially, no interchange. A big regional bank, however, said the Fed “will threaten the future of the payment system in the U.S.” if it doesn’t take the appropriate costs of offering debit cards into account. The groups also discussed issuers’ practices of steering cardholders to use signature debit cards (which carry higher interchange than PIN-debit cards), the cost to consumers of recovering fraud losses, and the ability of lower interchange to spur cost controls.
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