Date: Monday, October 10, 2011
From: Interim CEO, Dan Mathews
RE: Debit Card “Swipe Fee” changes
On October 1, 2011 I sent you an email explaining the impact of the Debit Card "Swipe Fee" Changes with a brief explanation of what you can do and what NAMA is doing on your behalf. Today I want to give you an update as to our progress.
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- We have been in direct contact at the highest levels with both BAMS and VISA asking for immediate relief.
- A member of our Board of Directors has been in contact with the office of House Small Business Committee Chair Rep. Sam Graves (R-6th-MO) and has set an appoint later this month.
- Our Lobbyist is in process of contacting: IL Sen. Richard J. Durbin (D); IL Sen. Mark Steven Kirk (R); Federal Reserve Board Chair Ben S. Bernanke and Secretary of the Treasury Timothy F. Geithner asking for relief.
- We have posted numerous articles on the NAMA website to keep you current like the link attached below.
- BAMS is working on our behalf to protect the vending channel and ensure there is parity for within the industry and particularly for NAMA members. They can offer no promises but they believe the new rates will not stand in the present form.
- We have asked BAMS to prepare a statement for delivery to our members by early next week spelling out the exact impact of the new rates for vending, coffee service and foodservice as well as a statement of recommendations and current outlook.
We realize you cannot profitably continue to accept debit cards under the current program. We also understand that industry progress in implementing cashless payment systems is going to be dramatically slowed if there is no relief.
As a point of clarification Bank of America Merchant Services (BAMS) has not increased their fees to NAMA members but they are obligated to pass on the increases from the issuing banks. Also, BAMS is 49% owned by Bank of America but they operate as a totally separate business entity.
Again, please visit our website for daily updates.
Call me directly with any questions. Thank you for your patience while we try to work though this problem.
Date: October 1, 2011
To: All NAMA Members
From: COO Dan Mathews, Chairman Brad Ellis & the NAMA Board of Directors
Subject: DEBIT CARD “SWIPE FEE” CHANGES
The “Dodd-Frank Financial Reform Legislation” was enacted to bring fundamental changes to the U.S. financial system after the last financial crisis affecting the banking industry. The added “Durbin Amendment” required a limit on “swipe fees” that VISA, MasterCard and others can charge for debit card transactions.
Effective today, October 1, 2011 major changes will cut average debit card swipe fees by approximately 45%. Although this will be beneficial for large ticket transactions there is an adverse impact on the vending industry due to our typical “small ticket transactions”. This new cap could as much as triple the net “swipe fee” for small transactions (gateway provider contracts vary from operator to operator therefore the impact on rates will vary).
Card Companies/Banks now have the option to charge up to $.21 per transaction plus an additional .05% of the transaction to mitigate fraud losses and $.01 for fraud protection. The situation is changing every day so contact your provider directly to ask how the new rate caps will impact your business.
What you can do:
- Immediately contact your Congressional Representative and Senator to educate them on the adverse reaction this will have on your business, your customers and jobs. There are over 10,000 vending companies in the USA serving millions of consumers everyday. Cost increases will have to be passed onto consumers or debit card acceptance will be suspended
- Ask your provider to negotiate directly with VISA/MC on your behalf
What NAMA is doing:
- Actively engaged in exploring options for lessening/eliminating the adverse impact of the new debit card “swipe fee” cap
- Lobbying members of the Small Business Committee in the US House of representatives
- Mobilizing a grassroots effort to educate politicians on the adverse and clearly unintended consequences of this new law
- Using NAMA “Action Alerts” to communicate to our membership and provide appropriate talking points
- Directly and indirectly negotiating with VISA/MasterCard
- Adding a new link on the NAMA website to provide up-to-date information