New data released on Monday by the Electronic Payments Coalition shows that despite gas retailers saving $1 billion annually as a result of the Durbin Amendment, the savings are not being passed to consumers.
The Durbin Amendment caps interchange fees — or the amount a debit card issuing bank can charge a merchant to process a debit transaction. When regulators and lawmakers were debating the provision, retail trade group lobbyists promised that retailers would pass any savings resulting from the amendment to their customers in the form of lower prices.
“Whenever Congress meddles in an industry debate of who pays what, consumers never win,” Trish Wexler, a spokeswoman for the EPC, said. “One side gets a leg up and keeps their windfall, while consumers end up footing the bill. No one is surprised to see that gas retailers are keeping billions of dollars for themselves, while their customers continue to be punished at the pump. Americans should go to their gas stations and demand what’s theirs—a discount for debit.”
Cash discounts are increasing popular in gas retail while debit discounts are rarely available.
“Unlike a debit discount, cash discounts lure customers away from the convenience of the pump and into the convenience store, where they are lured into buying items with high mark-ups,” Wexler said.
In 2011 several retail groups filed suit against the Federal Reserve, claiming that the interchange rate is still too high and requesting that the rate be lowered even further, adding that neither merchants nor consumers are seeing the benefits of the present rate.