Big and Small Merchants are beginning to implement plans to share lower debit card swipe fees through passing savings along to customers.
CSP reports that “As retailers prepare for the implementation of the Federal Reserve’s new interchange fee rules this summer, several have begun offering discounts for cash customers,” according to the Merchants Payment Coalition, a trade group for retailers and small businesses.
While banks are resorted to "scare tactics" in an attempt to overturn swipe-fee reforms, according to the MPC, when the reforms go into effect on July 21, merchants will be able to offer similar incentives to customers who pay with debit cards.
The current boom in cash discounts is an indication of what is to come once the provisions of the Durbin amendment go into effect. Because merchants operate in a price-competitive retail environment, any decrease in costs will lead to a decrease in consumer prices, said the group.
As Thomas Robinson, CEO of Rotten Robbie convenience stores, Santa Clara, Calif., testified to the House Judiciary Committee: "There is not a businessman that doesn’t attempt to keep the margin. But the competition always drives it back out. And when you have a competitive market–and we definitely have a competitive market, unlike some others–those benefits will go to the consumer."
Lyle Beckwith, senior vice president of government relations at the National Association of Convenience Stores (NACS), told CSP that, "Lower merchant costs translate to lower customer prices, it’s as simple as that. Unlike the big Visa banks, which operate in a noncompetitive environment where price-fixing is the norm, merchants base their business decisions on the price-competitive retail environment where price is king."
Read the FULL STORY from CSP.
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