An amendment pushed by Sen. Jon Tester (D-MT) that would have delayed implementation of swipe fee reform for two years did not get enough votes in Senate yesterday to break a filibuster. The amendment picked up 54 votes for and 45 against, but needed 60 yes votes to go into effect.
Had it passed, Tester’s change would have delayed the Dick Durbin (D-IL) Amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act. The Durbin Amendment will cap the interchange fee that a merchant’s bank pays a customer’s bank when merchants accept debit cards at 12 cents per transaction, and go into effect on July 21.
“This is a landmark victory for American consumers that will give them the break from skyrocketing swipe fees that they have been seeking for years,” said Mathew Shay, president/CEO of the National Retail Federation, in a statement. “It will prevent more than $1 billion a month from being pocketed by big banks and, in turn, allow retailers to hold down prices for consumers.”
The NRF had denounced the Tester Amendment through a series of radio ads, and sent a letter to all Senate members Monday asking them to vote against the compromise. In the letter, the NRF called the amendment “a sham intended to kill swipe fee reform even more quickly than his original bill and should be seen for what it is.”
The Retail Industry Leaders Association echoed NRF’s approval of the Senate vote.
“With this distraction now behind us, retailers await the Federal Reserve’s final rules so they can begin implementing these reforms and saving consumers money,” RILA president Sandy Kennedy said in a statement.
But how big of a win will swipe fee reform be for merchants? That depends, says retail marketing consultant Kevin Coupe, who runs the daily enewsletter and blog MorningNewsBeat.com.
Coupe says if it ends up that retailers have just been looking for ways to improve their margins, and they have no intention of passing on the savings, they’ll not only look bad, but they’ll actually make the banks look good.
“I don’t think this is going to happen. I think that some big retailer will not only use the savings to lower prices, but also will turn this turn of events into a marketing program, which will create pressure on other retailers to do the same,” Coupe says.
Since retailers have rallied around the stance that a reduction in swipe fees will allow them to lower prices, they now have to live up to those words.
“People will be watching, especially because costs prices in general are going up, and this is one way that retailers may be able to hold the line,” Coupe says.