Fed expected to lower debit card fee cap

The Fed says the topic will be on the agenda at a meeting next week, with the Wall Street Journal reporting that there will a proposal to lower the cap.

Shares in Visa and Mastercard dipped on the news.

For the last 12 years, merchants have paid banks 21 cents plus 0.05% of the transaction cost for each debit card payments.

Retailers have long pushed for the Fed to reduce the cap. Stephanie Martz, general counsel, National Retail Federation, says: “These fees have been too high for too long and we’re glad to see the Fed is finally ready to act.”

Last month, the Supreme Court agreed to hear a case brought by merchants in North Dakota arguing that the fees are not proportional to the cost of processing a transaction.