Will Banning Debit Card Fees Actually Cut Costs?
Photo by The Consumerist via Flickr
Senator Jenny Oropeza is pushing harder than ever to promote her new Senate Bill 933 that would ban debit cards fees as the vote is expected to take place next week. Some businesses are adding “unfair checkout fees” to all purchases made with debit cards, she claims. Current California law prohibits checkout fees made with credit cards but does not mention the use of debit cards. Taking that as a green light, retailers have been increasing prices by 20 to 30 percent on purchases made with debit cards. And with the increase of debit card use, especially with government Social Security, potential unemployment checks and disability payments all issued via debit cards, Oropeza says these fees hit the low-income individuals the hardest.
But like anything in politics, not everyone agrees. Some say that the only reason why businesses charge checkout fees is to keep up with the ever-increasing transaction costs placed by electronic payment networks such as Visa, MasterCard and Interlink. If Oropeza’s bill bans debit card fees, then some claim businesses will simply have to increase prices of goods, cut spending in other areas, or limit debit card use for customers. Bottom line we are paying more money either way, it just depends how you want to pay it.