For all the talk about the importance of the alleged mom and pop businesses, it often seems like little is done to really help all of these independent entrepreneurs. This just changed. Retailers around the country are celebrating a new law in effect.
As of July 21, retailers will be paying much less to banks. This new regulation of swipe fees was authored by Sen. Richard Durbin (D-Ill.) and approved last year as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Currently, businesses have had to pay an average of 44 cents per every transaction paid with a debit card. On a given month, this really adds up. Banks receive $16 billion annually in swipe fee profits. Four banks alone reap the rewards of half of those fees. Small banks need not fret: it is only large banks with more that $10 billion in assets that are subject to this cap.
“With the economy still trying to gain momentum and consumers facing skyrocketing costs for necessities like food and fuel, this badly needed reform will help ensure our nation’s economic recovery,” said Matthew Shay of the National Retail Federation. “It will prevent more than $1 billion dollars a month from being pocketed by big banks and, in turn, allow retailers to hold down prices for consumers.”
Perhaps there will be room for new jobs in the retail industry, as businesses are able to lower their prices and welcome consumers to benefit from this change in the structure of the economy.