Community pharmacies could see some immediate relief from the so-called interchange or swipe fees that must be paid on credit or debit card transactions, with the Senate’s passage of a Wall Street reform bill.
The legislation, the Restoring American Financial Stability Act of 2010 or H.R. 4173, includes an amendment by U.S. Senator Richard Durbin (D-Ill.) that was approved on a bipartisan vote and was supported by NCPA. President Obama is expected to sign the measure into law next week.
Once that happens, community pharmacies can take advantage of two of the amendment’s provisions right away:
1) Establishing a minimum transaction amount (up to $10) for the use of a credit card.
2) Offering discounts to customers for using a lower cost payment method (i.e., cash vs. credit card).
Longer-term, the legislation should also result in lower debit card interchange/swipe fees. Specifically, the Durbin amendment requires the Federal Reserve to ensure debit interchange fees are “reasonable and proportional,” such as to cover appropriate anti-fraud costs. Small banks and credit unions with assets of $10 billion or less are exempt.
According to DealBook, a New York Times blog, banks collected about $48 billion in interchange fees in 2008. According to that same account, Bank of America predicted its revenue from these fees could be reduced by as much as $2.3 billion, suggesting that the savings for community pharmacies and their patients could be significant.
On June 17, 2010, NCPA wrote to Senate and House lawmakers negotiating this final bill and urged them to retain the Durbin amendment. NCPA’s statement thanking lawmakers for keeping the interchange fee reforms in the combined House-Senate Wall Street reform bill can be found here.