

"Capped" debit card swipe fees are too high rules Federal judge - shawnee_
http://www.washingtonpost.com/business/economy/court-sides-with-retailers-goes-against-fed-rule-on-debit-card-fees/2013/07/31/4f9317ca-fa16-11e2-a369-d1954abcb7e3_story.html

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shawnee_
This is why I was fired from Balanced Payments:

I understood exactly what the Federal judge eventually concluded -- that
payments processing is becoming like a commodity (think web hosting), and that
interchange fees have been unnecessarily bloated for a long time. There is no
reason that any financial entity that processes a payment can justify 21 cents
per swipe for the processing _swipe alone_. The swipe is the recording of the

    
    
      - cc #
      - day/time/place of swipe or "submit payment"  
      - expiration date
      - cvc code
    

which when put together all add up to one little thing called an "auth" code.
Maybe. . . 200 - 999 bytes for the swipe data alone.

 _Even though the Fed had initially proposed a cap of about 12 cents, the
final rule was expanded to cover more items, including the cost of equipment
and fraud-prevention technology (after an extensive lobbying campaign by the
banking industry). That was improper, the court ruled._

All the other stuff -- the fraud detection items and whatnot are what
companies should be competing (based on price) on.

The only way that this change could have been done was from the inside out:
some high-tech "startup" from Silicon Valley could have been the first mover
and propogated this change without any Federal intervention. But no: YC guys
like the ones at Balanced we want to believe are "good" just are not; try to
get them stand up for what's right and get fired and have your career damaged
in a bad way.

 _The court decision could result in debit fees being cut by more than 50
percent, Guggenheim Partners said in a note to investors. Fees probably will
revert to the 7 cents to 12 cents per transaction that the Fed had initially
proposed, the note said._

But the sad thing is it probably won't matter. The merchants / marketplaces
will get the windfall, or the banks processing payments will either way -- The
average consumer will be none the wiser, and the cost savings will never get
passed on to the end consumer -- always up in the chain.

More info about what exactly happened is here:
[http://intuitiveink.tumblr.com/](http://intuitiveink.tumblr.com/)

