WASHINGTON (9/19/14)--The Federal Reserve Board Thursday said it will not propose any changes to its cap on debit card interchange fees. The Fed said the decision is based on results of its survey of costs associated with debit card transactions, a survey it executes every two years.
This most recent survey, based on 2013 data, indicates that 64% of card issuers covered by the Fed's interchange fee rules had an average cost for authorizing, clearing and settling (ACS) transactions that fell below the Fed's cap.
Implementing a provision of the 2010 Dodd-Frank Act, the Fed set a cap on debit interchange fees for issuers with assets of $10 billion or more at 21 cents, and allows certain other charges to cover fraud losses and fraud prevention.
The 64% is "slightly lower than the 66% of covered issuers with average ACS costs below the maximum interchange fee in 2011," the Fed noted in Thursday's release. "Covered issuers with average ACS costs below the maximum interchange fee in 2013 processed over 99% of all reported covered transactions, the same proportion as in 2011."
Also in the report, the Fed estimates that debit-card fraud losses to all parties--merchants, cardholders, and issuers--was $1.57 billion in 2013, with an average loss of approximately 8 basis points as a share of transaction value. That was up slightly from 2011.
Use the resource link to access the Fed release and access the survey.