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20/12/2010 -
The Network Branded Prepaid Card Association recently released a statement expressing concern that the Federal Reserve's proposed interchange fee rule may increase payment processing costs for consumers and card issuers.Leaders of the association fear that there are certain requirements in the proposed rule that will lead to inefficiencies, including the mandate that prepaid gift cards and flexible spending account cards are included in the PIN-based debit category.
The proposed rule reduces signature and PIN debit interchange rates to 12 cents per transaction down from 56 cents and 23 cents respectively, Barrons reports. This results in a 70 to 80 percent reduction in total debit interchange rates, exceeding the previously expected 50 to 60 percent reduction, according to the news source.
"NBPCA looks forward to submitting comments to the Federal Reserve and hopes it will clarify how exemptions will be handled in its final rule. Failure to do so could reduce the availability of prepaid cards, resulting in a catastrophic impact on consumers and governments," said Kirsten Trusko, NBPCA president and executive director.
The exemptions that Trusko seeks to have clarified are related to government benefit card and reloadable card regulations under the proposed interchange fee rule, required by the Dodd-Frank Wall Street Reform Act.
