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There are several myths surrounding the use issue of rewards credit cards, illustrated in Emily Stewart’s piece, “The Ugly Truth Behind Your Fancy Rewards Credit Card.” Addressed below are several faulty claims about credit rewards, which are consistently repeated across a multitude of media outlets as well as groups in opposition to the EPC.
The Durbin Amendment, passed as part of Dodd-Frank in 2010, established a government-imposed price control on interchange fees for debit cards. This cap has resulted in a massive transfer of income from consumers to retailers. In fact, according to a recently-conducted analysis using data from the Federal Reserve, since 2012, issuers have lost nearly $106 billion in interchange revenue — including an estimated $15.2 billion in 2020 alone.
Today, EPC released a new resource that explains what interchange is and how it works, and highlights the overall value it brings to the electronic payments system, including consumers and merchants. It includes information on the growth of electronic payments and how interchange rates have remained steady over time. This resource also addresses common retailer myths.
Today, EPC released a new resource that succinctly explains what interchange is, how it works alongside other fees, and overall what portion of total sales revenue it entails. It includes information on the growth of electronic payments and how interchange rates have remained steady over time. For a more detailed overview of interchange and more information on the value it provides to merchants and consumers, please see this resource here.
July 21st marks the tenth anniversary of the Dodd-Frank Act, which included the Durbin Amendment’s price controls on debit cards. EPC marks the day by promising to continue fighting back against the failed policy. “Ten years after the signing of Dodd-Frank, the Durbin Amendment continues to be an abysmal failure that hurts consumers, small businesses, credit unions and community banks,” said Jeff Tassey, chairman of the board of the Electronic Payments Coalition (EPC). “Retailers promised to pass savings on to consumers, but big-box stores have instead pocketed billions of dollars and raised prices while consumers saw free checking accounts and popular debit card rewards programs vanish.” Retailer special interest groups continue to defend the policy despite more than a dozen studies showing the price controls’ failures. Furthermore, since 2012, issuers have lost more than $90 billion in interchange revenue — including an estimated $14 billion in 2019 alone. “A decade … Continue reading