The Federal Reserve Board is seeking input on a plan to reduce the maximum interchange fee that large debit card issuers can receive for processing transactions. The proposal includes a regular updating process for adjusting the maximum fee every two years. As mandated by law, the Board must establish guidelines to determine if the fees received by issuers are reasonable and proportional to their costs. In 2011, the Board implemented an interchange fee cap for issuers with over $10 billion in assets. The proposed adjustments would reflect changes in issuer costs since the rule was first put in place. For example, the cap on a $50 debit card transaction would decrease from 24.5 cents to 17.7 cents. The proposal also outlines a method for future adjustments based on cost data provided by large debit card issuers. Additionally, the Board has approved the release of a biennial report containing data on interchange fees, issuer costs, and debit card transaction fraud in 2021. The public comment period will end 90 days after the proposal is published in the Federal Register.
Read the original Federal Reserve release here.