National Restaurant Association Presses For Implementation of “Swipe Fee” Provision

National Restaurant Association Presses For Implementation of "Swipe Fee" ProvisionThe National Restaurant Association and its members are sending a strong message to Congress to support the timely and accurate implementation of a law passed last year to make merchant “swipe fees” for debit cards more reasonable.

The House Financial Services panel’s subcommittee on financial institutions and consumer credit is holding a hearing on the issue today. The National Restaurant Association is represented as an executive committee member of the Merchants Payments Coalition, a broad coalition representing millions of businesses, from restaurants to florists and convenience stores.

The Association sent a letter Wednesday to every member of the U.S. House Financial Services Committee, urging committee members to support full implementation of the Durbin Amendment, which Congress passed last summer as part of the financial-services reform bill. The amendment was approved by a 64-33 vote, with strong support from Democrats and Republicans.

The National Restaurant Association “urges you to allow the Federal Reserve to continue the process of implementing the provision as directed under the law,” said Association Executive Vice President for Policy and Government Affairs Scott DeFife in the letter.

The system of fees and contractual restrictions that Visa and Mastercard place on everyone who accepts their cards as payment, including restaurants, isn’t working, DeFife said.

“Many of these swipe fees and restrictions benefit the card networks and card-issuing banks at the expense of merchants – and ultimately, consumers,” said DeFife. “Swipe fees on debit and credit card transactions, which amount to $48 billion annually, have been a growing expense for restaurants, and are the third highest cost for many establishments, usually following only labor and food expenses.”

“Debit transactions are directly drawn from a consumer’s checking account, yet the interchange rate on debit transactions continues to increase,” DeFife said. “This provision would modernize our financial payments system, provide relief to businesses who have seen their interchange fees skyrocket in recent years, and benefit consumers in the form of lower prices,” he wrote. “We urge your support in allowing the Federal Reserve process to continue without delay.”

The Durbin Amendment authorized the Federal Reserve to publish regulations to ensure that the swipe fees merchants get charged when guests pay by debit card are reasonable and proportional to the cost of processing those transactions. The Federal Reserve issued proposed regulations in December. The proposal is due to be finalized by April 22 and go into effect by July 22.

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 960,000 restaurant and foodservice outlets and a workforce of nearly 13 million employees. Together with the National Restaurant Association Educational Foundation, the Association works to lead America’s restaurant industry into a new era of prosperity, prominence, and participation, enhancing the quality of life for all we serve. For more information, visit our Web site at