Two-thirds of consumers surveyed last fall did not believe interchange regulations that that would limit how much retailers pay to accept debit cards would result in merchants lowering the prices they charge, according to research from Javelin Strategy & Research.
In a September survey of nearly 5,000 consumers, 66% of respondents said they did not expect merchants to lower prices if interchange regulation lowered their debit-processing costs. Only 13% said merchants would lower prices, and 12% said they expected merchants to lower prices when debit cards were used to pay for transactions.
The Federal Reserve Board continues to review its proposal to cap debit card interchange at between 7 cents and 12 cents per transaction from the current average of 44 cents per transaction (
The interchange savings to merchants resulting from cap on debit card interchange is not significant enough for merchants to adjust their pricing, says Beth Robertson, Javelin director of payments. “Merchants don’t change their prices that often, and they do a lot of focal-point pricing, like $9.99,” she says. “Merchants are not going to go down to $9.67 cents if they are only saving 32 cents per debit transaction.”
