Do you accept debit cards as a form of payment, and offer a device  to customers so that they can input their PIN codes? When you signed a contract with your credit card processing company or bank, this undoubtedly included a per-swipe fee for this type of debit card use.  The national average for this charge, according to a recent Associated Press article, is a whopping 44¢ per transaction.

There is good news on the horizon, however, with a new regulatory law taking effect on October 1 that will set a cap of 21¢ per card swipe.  The new Federal Reserve regulation will, however, also increase the amount that credit card processors can charge for covering fraud prevention.

A 2009 Nilson Report showed that merchants paid a grand total of $19.7 billion in debit transaction fees.  No matter how small your portion is of this huge amount, it is nevertheless worth investigating whether this new regulation will help you lower the percentage that you are being charged.

The Associated Press story states that banks and credit unions with assets of under $10 billion are except from the rule, on the premise that they rely more on swipe fees. This means that you may need to select a network that charges a lower fee, even if it means going to a processing company outside your local area.

Bank fees are a large percentage of the costs of running almost any type of business today.  Any change in the amount of these fees can have a significant impact on your bottom line. In light of this new regulation, this would be a good time to examine your credit card processing contract to see if you put a dent in your “per swipe” fee on debit card transactions.

Happy Retailing,

Carol “Orange” Schroeder