|Banks say the controversial amendment by Sen. Richard Durbin (D.-Il.) punished them only to help big retailers like Illinois-based Walgreen.|
In its letter to the Fed, The Home Depot said interchange fees were the company's third-highest operating cost after occupancy and wages. The Home Depot CFO Carol Tome told investors during an earnings call in Feb. 2011 that an initial draft of the rule suggested the benefit to the company "could be $35 million a year." Under that proposal, interchange fees were capped at 12 cents per transaction. They were eventually capped at 24 cents, suggesting a benefit to The Home Depot of $17.5 million. A spokesman for The Home Depot declined to comment on the number, saying the savings was not material.
It is clear at the very least that the law has created opportunities for certain businesses across a few different industries and sub-industries that they exploit in different ways. Take merchant acquirers, for example. These companies facilitate debit card transactions, charging a fee to merchants for their services. Acquirers bundle their fees together with the interchange rate, enabling them to take advantage of small or even mid-size retailers unaware that the interchange rate has been lowered. The acquirers can raise their fees by the same amount the interchange has dropped without retailers noticing a difference.