Dive Brief:
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A three-judge U.S. appeals court Friday ruled against retailers and upheld Federal Reserve rules from 2011 that capped debit swipe fees at higher rates than what retailers said was intended by Congress.
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Retailers sued the Fed and won a lower-court ruling on the issue. The Fed regulations are part of the enforcement rules for the Dodd-Frank banking reform law.
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Banks and credit card companies hailed the ruling, while retail groups said they were considering a further appeal, which could go to a wider appellate court or the U.S. Supreme Court.
Dive Insight:
The first question that comes to mind is why consumers are using their debit cards at retail locations at all, especially after the massive breaches that occurred over the holidays. (While most fraudulent transactions are ultimately not paid by consumers, it can put bank accounts at risk while investigations over such transactions are sorted out.) But this is a loss for retailers, who have to either pay the higher swipe fees out of their own pockets, or pass them on to consumers in the form of higher prices.