CMS Payments Intelligence (CMSpi), an independent consultancy, is calling on regulators to cap those fees in the same way as debit cards following the recent decision of a federal appeals court to dismiss the USD 7.25-billion proposed settlement between millions of retailers and Visa and MasterCard.
The CMSpi report, Regulating Credit Card Interchange Fees, addresses the challenges of developing an adequate methodology for regulating swipe fees and uncovers the extent of the cost relief new regulation would afford merchants.
The report concludes that the new credit card interchange cap should be set at 22 cents per transaction plus 30.5 basis points for covered issuers; this calculation uses as its framework the 2011 Durbin Amendment, the incumbent regulation currently covering debit cards.
CMSpi CEO Brendan Doyle said: “US merchants large and small are still paying excessive credit card interchange fees. Many other jurisdictions have regulated credit card interchange fees but the US has yet to do so, meaning that credit card interchange fees in the US average close to 2% of the transaction value and are currently among the highest in the world.”
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