Payments

Retail group lauds Supreme Court decision to hear swipe fee case

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October 3, 2023

The National Retail Federation welcomed the U.S. Supreme Court's recent decision to hear a lawsuit seeking to have the Federal Reserve lower its 12-year-old cap on "swipe" fees banks charge merchants to process debit card transactions.

The justices accepted the case after appellate courts disagreed on whether the 2021 case was brought too late, according to a press release from the federation.

"Regulations that ignore the intent of Congress and harm a business owner later don't become less arbitrary merely by the passage of time. Basic concepts of due process and fairness require federal agencies to adhere to the laws that Congress drafts regardless of when the rules to implement those laws were issued," Stephanie Martz, NRF chief administrative officer and general counsel, said in the press release.

"Beyond the statute of limitations question, the Fed set the debit card swipe fee cap far too high in the first place and has failed to update it as required by Congress," Martz said. "Banks' costs of processing transactions have fallen dramatically, and these fees continue to drive up costs for merchants and prices for consumers. Retailers are now paying twice as much as they should if the Fed had followed the law. If the Fed isn't going to act on its own, the courts need to enforce the law."

The Supreme Court agreed to hear an appeal brought by the Corner Post, a Watford City, North Dakota truck stop and convenience store. The case challenged a Federal Reserve cap on debit card swipe fees that took effect in 2011.