Washington, DC (PRWEB) July 31, 2014
This summer, Americans are facing average retail gasoline prices of around $3.61 per gallon. Unfortunately, despite the strain that these high prices place on consumers, there is still no evidence that gas retailers are passing on any of the roughly $1 billion annual subsidy they receive from the Durbin amendment on to consumers in the form of lower prices.
“Retailers convinced Congress to lower debit interchange fees by promising they would pass the savings onto consumers yet there’s no evidence consumers are seeing lower prices,” said Jeff Tassey, Executive Director of the Electronic Payments Coalition. “Likewise, Payment Networks voluntarily capped the fees that they charge gas retailers on fuel transactions in the hope that doing so would lower gas prices for consumers. Unfortunately, gas retailers took all the money and ran—sticking their customers with the bill.”
In 2011, Congress passed the Durbin amendment, a provision of the Dodd-Frank legislation, which capped what retailers pay to accept debit cards, reducing interchange rates by about 70 percent; this is in addition to the voluntary fuel caps by Visa and MasterCard. This has resulted in millions of dollars in savings for gas retailers, and has helped them to avoid almost entirely any fluctuation in fees resulting from changes in the price of a gallon of gas. However, there is still no evidence that gas stations are passing on savings from these windfalls to their customers.
Debit, the type of payment impacted by the Durbin amendment, is an extremely popular payment choice at the pump, accounting for about half of all non-cash payments for fuel (and 36 percent of all payments including cash).
Consumers can visit http://www.WheresMyDebitDiscount.com for an online savings calculator to find out what consumers could save at the pump when paying with debit. For example, the average 16 gallon fill-up paid with a debit card at today’s gas prices could receive 4 - 5 cents per gallon as a discount.
Cash discounts are more prevalent in gas retailing, while discounts for debit are virtually non-existent – the very area where gas retailers received the Durbin subsidy. “Retailers refuse to pass on the savings they receive from the Durbin amendment by offering discounts on debit purchases,” said Jeff Tassey, Executive Director of the Electronic Payments Coalition.
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC educates policymakers, consumers and the media on the system’s role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.