How about ‘‘each pays his own way?’’

Over at Instapundit, we have:

...which links to:

... while eliminating debit cards would be a drastic move by the banks, you would more likely see the end of things like ‘‘free’’ checking.

The reason for this is ‘‘interchange fees’’.  Or, more precisely, price controls on interchange fees.  Interchange fees are the fees banks charge retailers for processing the use of debit cards.  The interchange fee used to be about 1.35% of the amount purchased at the retailer.  This enabled banks to cover the costs of debit cards and offer other perks such as ‘‘free’’ checking.

Because the price of the interchange fee may soon be set at .03-.06 cents per transaction, banks have to figure out another way to cover their costs.  Say welcome back to fees for checking.

So let me see:  A system under which all customers pay higher prices^[1] so that some people^[2] get free checking accounts is supposed to be a good thing?

Hey, I’ve got this revolutionary idea...


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Posted by: Old Grouch in In Passing at 17:32:15 GMT | No Comments | Add Comment
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