Washington Examiner says it's Wal-Mart's fault

So it was Banks vs. Wal-Mart fighting for Dick Durbin's favorite lobbyist's favor... and the consumer lost.

I don't agree with your conclusion that the consumer lost.

In this clash of the titans, as your article casts it, who pays the costs for interchange transactions has been shifted from the merchants to the customer. Well, that doesn't wash.

ALL the costs are borne by the customer, aren't they? Wal-Mart's not minting any money to give to BofA, are they? But the biggest break, no, the biggest assumption made by the author of the story is that the money once paid by the merchant will now be paid by the debit-card-swiper. And that's just not true. It will be for BofA debit card users, but Wal-Mart's got customers that pay from lots of different sources, not just BofA.

This story is about BofA making the bold (in terms of plain talking) business decision to start charging for a service that previously did not incur a fee. To "blame" it on Wal-Mart is a bit silly. To say that Wal-Mart will reap substantial benefits is perfectly fine. To say that the customer "lost" is also a stretch. BofA customers now have another reason to assess whether or not they're getting fair value for their money.

For me, that answer was hell no. I've known that answer for years. But, BofA's got lots going for it, and I wish them success. I just think that they're going to face some serious resistance for making this choice.

Were not the debit cards pushed by banks? So they could save a ton on paper work.
Someone needs to look at restarting the check verify outfits again.

Well, merchants will either pocket the money or lower prices, depending on the competitiveness of prices in their business, so everyone but BofA debit card users will be unaffected or better off. If enough people drop their BofA debit cards, they may have to drop the charge, or provide some sort of service to make their debit cards more attractive.

What other banks and area credit unions plan to do so far, by the Oregonian

(summary: other major banks are considering fees, no small banks or credit unions in OR are considering it)

GO DUCKS !

From your link:

That is a lot of money to operate such a network. I understand it is not all profit, that it's just revenue. But I don't think that they take a loss on the operation. Card payment networks have been in place for years, these are mature operations that don't have startup costs, communication costs for other similarly large networks, cell phones for example, have gone down.

Also, this aspect of the law is only for operations that have more than $10 billion in assets. Meaning that for a smaller bank, these caps on interchange fees don't apply. For all the hullabaloo surrounding the importance of helping small businesses. Well, this is exactly that. Compared to banks that have more than $10 billion dollars that is. Apparently my understanding of what constitutes "small business" needs some recalibration.

The banks subject to the restriction, they'll try to recover the revenue no longer available to them via the interchange fees, exactly what BofA is doing. I see this as an example of how we can make rules that correct the enormous imbalance that is currently in favor of BIG MONEY. Money attracts money, and this one change flies in the face of that.

that must be why the credit union wanted me to take my accounts elsewhere

so they wouldn't get dinged by this fee

bwaaaahahahahahahahha


No, really.

Other banks are already doing this as well. There are at least two others doing it in test markets @ $3.00 and several more about to roll it out as well.

I say we go back to an all-cash system. It will confuse the teenagers and give black market products a much-needed boost.

I like this unintended consequence of the Durbin amendment.

I don't think its right that businesses are held hostage to the swipe fees that banks charge them, because they would lose customers if they started denying cards. It feels sort of like a monopoly. But that's not necessarily true for bank customers. They can shop around for banks that either don't charge fees or at least charge the lowest fee.

I shop at a lot of places that don't accept cards or checks. Cash only. If you are good enough you can command those terms.

They make awesome pizza.

My kids' preschool over the summer would add 3% to the tuition cost if you paid with a credit card, or 5% if it was any kind of "rewards" card.

Prolly what they get charged to process the transaction.