The Fed Takes Aim At 'Swipe Fees'

If approved, 'swipe fees' on debit card transaction would fall by over 25% under the plan.

A young man uses a debit card at an ATM machine
(Image credit: Getty Images)

The Federal Reserve has proposed lowering the maximum fee that large debit card issuers charge merchants for a debit card transaction, a move that would benefit both merchants and consumers.

Under the proposal, the interchange fee cap, or so-called "swipe fees," would decrease from 21 cents to 14.4 cents plus 0.04% of the transaction amount. That would mean, for example, that the maximum fee on an average-sized $50 debit card transaction would decline from 24.5 cents under the current rule to 17.7 cents under the proposal, the Fed said.

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Joey Solitro

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.