|Shoppers may see even lower swipe fees at the checkout, but banks will surely look elsewhere to make up for billions in lost revenue.|
- Banks will lose billions of dollars after already suffering significant cutbacks in revenue. Whenever banks lose revenue in one area, they try to make up for it in another, and that always comes at the expense of the consumer. An increase in existing fees, the introduction of others and an increase in the credit card interest rates are changes that could be pushed.
- A significant decrease in credit card reward programs. The lucrative cash back and airline mile rewards will likely decline. Most banks eliminated debit card rewards when the Durbin amendment passed. The same could happen with credit card programs if retailers win this suit.
- A likely decrease in attractive balance transfer offers. Currently, credit card issuers are offering 0% interest rates for extended periods to lure customers from their competitors. The Citi Platinum Select card offers 0% for 21 months; the Discover (DFS) More card offers 0% for 18 months; and the Slate from Chase card offers 0% for 12 months with no balance transfer fee. If retailers win this antitrust suit, look for credit card issuers to scale back these balance transfer offers.
- On the positive side, there could be a decrease in prices at store level. Retailers claimed the passage of the Durbin amendment could lead to a decrease in prices, since they would no longer have to pay the high swipe fees on debit card transactions. It is difficult to see if this actually took place. Retailers may face more pressure from consumer groups to cut prices if the interchange fee is also slashed on credit card purchases, though.