Todd Zywicki, a professor of law at George Mason University, wrote an analysis of the debit card interchange fee changes in The Wall Street Journal. The analysis notes that banks, in response to restrictions on interchange fees, is raising fees in other areas, such as bank account fees and fees for debit card purchases.
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Editor’s Insight: When the Federal Reserve Board approved the Durbin amendment several months ago, many observes expressed concern that banks will begin raising certain fees to compensate for the anticipated loss they will incur in debit transactions. Hence, the recent decision to impose fees on debit card accounts and higher transaction fees for small ticket transactions. Payment industry observers are predicting that banks will now attempt to drive the market towards credit cards. However, as Todd Zywicki notes in this Wall Street Journal article, the banks could also seek to extend price controls to credit cards as well as debit cards. As the vending industry moves more into cashless commerce, the industry must keep a close eye on regulatory activity as it pertains to cashless. 10-03-11
