Judge Rules Swipe Fees “Inappropriately” High

Retailers and credit card companies have been battling over swipe fees for years now with consumers unfortunately caught in the middle. On the one side, banks claim that retailers are violating consumers’ rights by charging more to pay with credit card than cash. On the other side, retailers claim that swipe fees are cutting into small business’ profits and driving up costs.

This week, however, a federal judge ruled in favor of retailers, saying that swipe fees were “inappropriately” high. Judge Richard J. Leon had some strong words for the banks and credit card companies as well as the Federal Reserve Board which had allowed swipe fees to rise up to as much as 24 cents per transaction.

In a prepared statement, the top lawyer for the National Retail Federation praised the ruling and chastised the Federal Reserve Board for “fail[ing] to heed Congress’ call to see fee standards that were ‘reasonable’ and ‘proportional’ to the actual cost of a transaction.” The Retail Industry Leaders Association also welcomed the ruling as an “opportunity to ensure the law is finally implemented as intented,” going on to say that the Federal Reserve had “muted the law’s intended benefits.”

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