CNN Money is reporting that JPMorgan Chase is considering capping debit card transactions at either $50 or $100. When consumers swipe their debit cards, retailers pay the cardholder’s bank approximately 44 cents. However as part of the Wall Street reform legislation that was passed last year those fees are being capped at 12 cents. While this may not seem like a lot of money it is estimated that it will cost JPMorgan Chase more than $1 billion a year.
If other banks follow their lead, this could be bad news for consumers who rely on their debit cards to make purchases. Experts believe that more people will use cash, checks or credit cards as a result. I imagine consumers, especially ones with lower income or bad credit, will start to look for alternatives to traditional debit cards in the near future such as opting out of the traditional banking system altogether. I am just curious if this applies to all debit card transactions or just those that use a PIN code.
Read the full article from CNN.