WASHINGTON ( TheStreet) -- Small-business owners expressed outrage Thursday in reaction to the Federal Reserve's final ruling on debit card interchange fees.
"It is beyond disappointing that after fighting for months to bring fairness and transparency to debit-card swipe fees in order to give hard-working Americans a much-needed break, the Fed has given in to the pandering of Wall Street," according to a statement by Dennis Lane, spokesman for Reform Swipe Fees NOW!, a Washington-based coalition formed by the Retail Industry Leaders Association that advocates on debit and credit card swipe fees.
"Today's final regulations are even more generous than the Fed's proposed rules, guaranteeing the nation's biggest banks and credit card companies a more than 400% profit per transaction," says Lane, who is also a 7-Eleven franchisee. "Take it from someone who works on an average of a 1% to 2% profit -- that is just outrageous!"
After months of debate, the Federal Reserve Board ruled Wednesday that the maximum interchange fee an issuer may get for an electronic debit transaction will be the "sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction."While the new interchange fees are roughly half the current average debit card interchange fee, the Fed had originally proposed capping the fee at 12 cents -- the reason for the small-business tirade. "We were not prepared for a 21-cent rate," Lane said during a conference call with other small business owners and the media on Thursday. He added that many small businesses will be inhibited from initiating summer promotions and further hires as a result of higher-than-expected debit interchange cap.