Federal Reserve Extends Comment Period on Swipe Fees

Retailers have until May 12 to submit appeals to reduce transaction cost
Swipe fees
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The Federal Reserve Board has extended the comment period on its debit card swipe fee proposal by 60 days, making the final day to file comments May 12.

The proposal, made in October, would lower the amount banks can charge for debit swipe fees from 21 cents to 14.4 cents per transaction.

The National Retail Federation (NRF) said the lower cap “is a welcome move but still leaves the fees significantly higher than banks’ cost to process the transactions.”

A New Methodology

In addition, the proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered by the board from large debit card issuers.

The base component would be the product of the transaction-weighted average of per-transaction base component costs across covered issuers and a fixed multiplier, rounded to the nearest 10th of one cent.

The fixed multiplier would correspond to a target selected by the board for a reasonable percentage of covered issuer transactions, 3.7%, and covered issuers should recover 98.5% of their base component costs over time.

Why it Matters

Swipe fees are most retailers’ highest operating cost after labor and drive consumer prices up by more than $1,000 a year, according to the NRF.

Swipe fees have grown from about $20 billion a year when NRF began tracking them in 2001 to $160.7 billion in 2022, according to the Nilson Report.

Despite recent changes, the NRF said, card industry contracts, rules and practices still make it difficult to offer a cash discount, meaning most customers pay the credit card price—including the swipe fee—regardless of whether they use a card or not. And as a percentage of the transaction, swipe fees go up automatically as prices increase, creating a multiplier effect for today’s rampant inflation.

What Retailers Can Do

To submit comments to the Federal Reserve, write a letter advocating to reduce the rate, and send it to with the subject line Docket No. R–1818.

The National Association of Convenience Stores (NACS) also has a template letter for retailers to customize.

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