#Debit Card – #Credit Card Fees – Additional #Income

Enter the local market on Round Hill Road in Greenwich, CT to purchase one of their amazing $7.00 tuna sandwiches and the clerk states, “You have to purchase at least $10 or pay an additional .50 cents”.

According to the Federal Reserve, the average interchange fee per transaction for all debit card issuers in 2009 was 43 cents. Data collected from the fourth quarter of 2011 indicated that the average interchange fee received by non-exempt issuers declines 45% from the 2009 level to 24 cents. – Source Google Search

In order to process credit cards and debit cards, a merchant must negotiate a “merchant discount fee” either with his or her financial institution or, for Discover and American Express, with the credit card company directly. The negotiated fee is then subtracted from each customer transaction with a credit or debit card. The “interchange transaction fee,” which is paid to the credit or debit card issuer, makes up the largest percentage of the merchant discount fee and is the focus of this report.

In 2011, the Federal Reserve adopted Regulation II, which limits the amount of interchange fees that debit card issuers can charge for transactions. The rule limits the interchange fee to a maximum of 21 cents plus .05% of the transaction value. The rule exempts financial institutions with less than $10 billion in assets. To date, there are no such laws or regulations limiting the interchange transaction fees an issuer may charge for credit card purchases. Since credit card interchange fees vary significantly from one card to another and from one merchant to another, some merchants may pay higher fees for credit card transactions while others pay higher fees for debit card transactions. Source – OLR Research Report

I wonder if Round Hill Road Store claims the balance of fees charged as income?

Round Hill Road Store, Round Hill Road, Greenwich, CT

 

 

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About MsConcerned

“Upon descending our threaded words on the web by a steep and hazardous precipice of readers requires constant review.”
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