Debit card swipe fees were notoriously painful for merchants and customers. Fortunately, the U.S. Senate smacked down the swipe pees, ridding the world of a financial fracas years in the making.
Fin. Right?
As it turns out, no. Banks were never going to take the Dodd-Frank Act provision lying down, not when they could throw a few wild haymakers. So now Wells Fargo is just the latest bank to consider trotting out a flat monthly fee for the use of debit cards. At $3 a pop, it would be an extra $36 a year on customers. JP Morgan is toying with the same idea, and others will probably follow suit.
If that doesn’t sound like much…well, it’s not. But it’s the principle. In a recent poll, the Associated Press found that some 61 percent of debit card customers said they would stop using their debit cards if those charges applied. Not all of those people would follow through, but some would. That, I would suspect, would be yet another dent in the revenues the banks argue they’re trying to preserve by doing this.
Keep in mind that swipe fees haven’t disappeared, either. They’ve gone from 44 cents a swipe to 21. Also keep in mind that some banks have canceled free checking and other customer perks and you’ll begin to understand why customers are on the verge of taking to the lifeboats when it comes to their debit cards.
Even keeping in mind that you won’t be charged the fee if you don’t use your card during a given month, this is an exceptionally bad public relations move. At best, it seems tone-deaf to the belt-tightening that’s ongoing across America, a consequence of the slow recovery. At worst, it seems like abject greed.
What do you think? Is this a sound business decision or an egregious mistake?
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