July 6, 2011
The Federal Reserve’s decision to raise debit swipe fee limits from 12 to 21-24 cents will allow banks to retain $3.5 billion in annual revenue, according a new Moody’s report.
The New York Times states TD Bank and TCF Financial are among those that will benefit the most from the higher cap, according to Moody’s. Some of the nation’s largest institutions, like Wells Fargo and Bank of America, still stand to lose around $1 billion in profits each year, Moody’s states.
Moody’s predicts the banks will recoup the revenue through means such as reducing rewards and increasing annual fees for debit charges.
“Our view is that most, if not all, of the lost revenue will be made up gradually, probably over a period of several years, through a variety of revenue enhancement measures,” Moody’s said.
Click here to read more on Moody’s debit report.
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