Friday, 09 August 2013

In Passing

How about ‘‘each pays his own way?’’

Subsidies for Me, but Screw You  Dept
Over at Instapundit, we have:
‘‘THE END OF FREE CHECKING? Thank Dick Durbin.’’
...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...

[1]   You don’t think that retailers eat the interchange costs, do you?
[2]   ...who don’t even have to be customers of those retailers...

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