Swipe fee reform is benefitting consumers by forcing banks to compete, according to a December report released by the Kansas City Federal Reserve Bank. The detailed 36-page report shows that for the average customer, free checking became more available after interchange fee reform. The report also proves that detractors’ skewed studies based on partial information are wrong.
The Kansas City Fed analyzed a broad sample of bank and compared their fee structures pre and post regulation. The Fed found that by dollar value, consumer access to free checking increased from 2011 to 2012. The footprint of all commercial banks that offered consumers free checking accounts increased from an estimated $184 billion in 2011 to $278 billion in 2012.
The reform has also helped consumers save at banks and at stores, noted economist Robert J. Shapiro reported in a study on swipe fee reform, That report showed that in 2012 alone, swipe fee reform generated almost $6 billion in savings to consumers in the form of lower prices and $2.6 billion in savings to merchants. It also supported 37,501 new jobs in 2012 alone.
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