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DALLAS -- There has been some questions raised -- perhaps cynically by banks and financial institutions -- about whether or not the retail industry will pass along any savings from swipe fee reform to the consumer. One giant convenience store chain is saying consumers will notice the difference.
Bruce Maples, chairman of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF), said capping debit card transaction fees at 21 cents would save franchisees almost 50 percent of the cost of a debit transaction and consumers will benefit, according to PYMNTS.com. "The reform will save each franchisee in the country almost 50 percent of the cost of a debit transaction, which will ultimately be passed on to the customer in an effort to be more competitive or used by the franchises to grow their businesses or hire new employees," he said.
More to point, he explained that lower merchant costs will lead to lower consumer costs. "Most enterprising storeowners will apply the swipe fee savings to lowering product costs in an effort to be even more competitive in the marketplace," Maples told the news outlet. "Lower swipe fees enable us to give our customers the best cost of goods possible and to grow our businesses by adding employees. Unregulated swipe fees eat away at our revenue and prohibit us from hiring more employees and becoming more involved with the communities we serve."
As for any affect swipe fee reform will have on security, risk management and overall safety of debit payments, Maple does not think the new legislation will play any role. "I don't think any of these things should be affected. We all know that paying by check is more costly than paying by debit card, yet there is little or no cost to the consumer or the retailer if the consumer pays by check. Debit and credit card fees have simply spiraled out of control as debit transactions have replaced checks and now outnumber credit card transactions in our stores," he stated.
NCASEF joined a big push for reform in 2009, and in September of that year, approximately 40 7-Eleven franchisees delivered a petition with about 1.6 million signatures to Congress. Though the retail industry had been hoping for the 12-cent cap the Federal Reserve has proposed in December, the cap is good news for merchants, Maples said.
"Unregulated, debit swipe fees would continue to grow and continue to eat into the storeowner's profits, because we cannot do without debit card transactions," he told PYMNTS.com. "This action by Congress and the Federal Reserve, while not quite the level of change we had hoped for, at least puts a cap on what banks may charge and lets them know that retailers and the public are watching."