Credit Card Swipe Fees: A Hot Topic for Alabama Businesses

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As reported by the Birmingham News, credit card swipe fees are a hot topic in Alabama right now, often pitting small business against local banks. The use of debit cards continues to grow, accounting for 35 percent of noncash payment transactions.

The Proposal

As part of ongoing financial reform efforts, the federal government has proposed new regulations that will limit the amount of money banks can collect for debit-card transactions.

Currently, swipe fees are about 1 to 2 percent of the transaction. The Federal Reserve, charged with setting a standard for fees that are “reasonable and proportional,” is proposing fees of 7 cents to 12 cents per transaction, which it predicts would reduce swipe fees by 70 percent.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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