After Congress dealt a blow to the hated debit card swipe fees that banks made so much money off of, banks immediately sought to work around it.
This is no surprise, of course. Banks long made a lot of money off of every swipe of a debit card at retailers, and they’re loath to give them up. Retailers and consumers are, unsurprisingly, pretty happy to see them gone. Especially those shops whose revenues were bitten into by the debit card fees.
Bank of America was the first but not the last to strongly consider formulating new fees to make up for that, and they plowed ahead with a plan to charge millions of customers $5 a month if they used their cards. This went over like Ronald McDonald at a Burger King, as you might imagine, with Congressional leaders, merchants and customers uniting to verbally hammer the banking giant.
Mother Jones has a sardonic take on the news, quoting directly from the Wall Street Journal, which broke the news. As a result, the article notes, other banks are backpedaling.
A month after Bank of America got pummeled by consumers and politicians for introducing plans for new debit-card fees, most other big U.S. banks are steering clear of imposing similar charges.
Following eight months of consumer testing, J.P. Morgan Chase & Co. has decided that it won’t charge customers who use their debit cards to make purchases….J.P. Morgan joins U.S. Bancorp, Citigroup Inc., PNC Financial Services Group Inc., KeyCorp and other large banks that have said in recent days that they won’t impose monthly fees on debit cards. None of those banks said they made their decisions because of the outcry over Bank of America’s fees.
Of course, that’s not entirely true. Banks got spooked by the absolutely savage public beating BoA took as a result of their decision to try charges. It doesn’t pay to lead in something that’s going to be unpopular with consumers, but those who are following give a very clear sense of what direction the wind is blowing in. It’s entirely possible that banks will quietly roll out hidden fees or something creative to take the place of the debit card fees they once relied on, but it’s going to have to be awfully quiet.
What do you think of Bank of America’s decision, and that of its’ competitors? Does it help your business?