Fed strikes compromise on swipe fee fix

The Federal Reserve has made some concessions to banks over the swipe fees charged to retailers for credit and debit card use. Wednesday, the Fed fixed the fee limit at 21 cents per transaction, less than half the current 44-cent average but nearly double the proposed fee of 12 cents. Additionally, the Fed says debit card issuers can tack on a fee of 0.05% of each purchase to cover a portion of fraud losses. Lawmakers recently sided with retailers in their years-long battle with banks, which argued the industry would lose billions if the fee were fixed at 12 cents. The new fee will begin being assessed Oct. 1, which is later than the original July 21 date. “Well, it’s better than 12 cents, but it still won’t cover our costs,” says Danny Montelaro, Regions Bank’s south Louisiana president. To read a longer version, click here.—Steve Sanoski