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This spring banks are expected see their revenues shrink thanks to new rules capping the fees businesses pay banks each time you use your debit card.
Is that good news or bad news for consumers John -- is the president of consumer education for Smart credit dot com John great -- -- Thank you very much -- for having me.
All right so I wouldn't go over some of these facts of this the new world as it is so people trying to get their arms around it -- essentially lobbied for this because they end up paying these fees they don't like at this.
That's -- these are about.
One point five to 4%.
They're only apply to debit cards in the average savings to consumers.
One point five -- two cents -- per dollar spent so obviously big change the way things are done in the background in the back office that consumers don't even see.
How -- end up affecting consumers do you thing.
While this this speed it's called leader of -- -- fee or they interchange fear of emergency which essentially is the speed of the merchant pays for the privilege of accepting a certain type of credit card.
Or debit card.
Essentially what is likely to happen is that that he is gonna get -- To some extent they'll likely say it but -- chance not the consumer but the -- at something like -- and if you can't see it that says the it's and I -- -- I had two pennies in my hand it's gonna say basically two cents for the merchant for every dollar that that the that that they except.
I'm on -- -- card that chances of this actually trickling down the into my pocket or your pocket or any consumers' pockets very very unlikely right simply because the amount to so small this is gonna help some retailers -- it's gonna help the big boys a lot.
It's not likely to help the small retailers very much because they about it you're not spending that much on a debit card -- -- laugh.
But John what about look at -- look at it from the other side let's look at it.
From the point you have cost of the banking in an industry average interchange rates are cut by 73%.
Swipe you -- -- cut by around thirteen billion dollars that's kind of -- not doing that well.
You can see -- -- big changes for banks are they gonna take it out of our -- I mean come on have to -- usually works.
Their -- pickup by legislators they turned us and raise -- somewhere else.
Let let's let's I had a very very good example of why this is gonna -- the consumer in the end.
But hard act the banking industry absorb three separate implementations of provisions of the card act in 2010 alone.
It's gonna end up costing them 58 billion dollars that's with a B Jerry billion dollars and what happens.
They reacted by increasing interest rates increase saying.
Fees and tacking on new -- this is yet another error insensitive.
For the banking industry to subsidize the implementation of some sort of restrictions on fees that they can charged to merchants and we are going to end up paying -- the banking industry.
Has been very very honest about this all along -- I know we like to beat up on a bit but they have been very honest about this all along.
They said very clearly that they are -- rebate the pricing of their products.
-- the implementation of the subsidizing.
Of these types of you restrictions and what are we going to happen not.
We're not everything increasing cost -- my -- -- -- so it is.
Well it's gonna hit it's we are gonna pay for -- not gonna see a line item on any statement that says this is the cap.
In -- the speed right we're not gonna get back out -- dining -- But it bought it will be -- back yeah -- anti Arab sources OK I had.
It's going to be -- back into AT&T yeah foreign transaction fees annual fees higher interest rates it's gonna be -- back -- To those types of fees and we're not gonna be we're going to be none the wiser we're just gonna see all the sudden look there's an increased -- -- -- -- And in the back of our mind we always have to keep in mind at the reason we're paying -- -- it's to help subsidize.
These types of rules.
So we can just reach out and help those retailers want more time.
-- spot fact that -- -- I check my -- got -- a.
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