Dick Durbin’s amendment to cap fees on debit card transactions to 23 cents has led Visa to charge the maximum fee for every transaction, but only for small retailers who have no clout:
Before the Durbin Amendment, a one-store coffeeshop might pay a 7-cent fee on a $2 cup of coffee and a 35-cent fee on a $20 group order. Durbin hoped to cap the latter fee at 23 cents, and leave the first unaffected: a ceiling, not a guideline. Instead, that $2 coffee may now come with a 22-cent interchange fee, an increase of over 200%, which will result in higher prices for consumers. Visa and MasterCard’s actions ensure that, far from paying lower interchange fees, small merchants will actually face much higher costs than before.
A lot of independent retailers already have signs urging customers to pay with cash instead of cards, because little shops pay top dollar for credit card interchange. I assume that a lot of them will just stop accepting debit cards if banks can take more than 10% off the top of a small transaction.
A few months ago, I moved my banking to USAA. USAA doesn’t have ATMs, so they reimburse me for ATM fees. Since they limit the number of withdrawals they reimburse, I’ve been taking out more money at every ATM trip, and I carry a lot more cash. I like it, because paying cash is easier and faster than using a credit card, especially with the rinky-dink point-of-sale machines that a lot of retailers use.
It’s a tiny action in the scheme of things, but if you want to send a little fuck you to Wall Street, move your money to a locally-owned bank or credit union (or USAA) that won’t charge you $5 to have a debit card, and start paying cash at all the small local shops.