July 8, 2021Blog Posts

Clash over debit card routing persists in comments to Fed


Clashing comments have gushed into the Federal Reserve in the past two months over its proposal to clarify rules on the routing of debit card transactions, and they show familiar battle lines being drawn.

The Fed in May proposed a clarification of existing rules requiring that debit card issuers ensure that at least two unaffiliated payment card networks are available for routing debit transactions. It had given interested parties until July 12 to comment and 41 comments have been filed to date, but on June 22 the central bank board extended the deadline for comments to Aug 11.

Nonetheless, it’s clear that commenters’ so far, including merchant groups and bank supporters, are taking the same opposing stances they’ve had for years. At issue is whether merchants and their consumers have access to competing networks for routing debit card transactions. Merchants and their interest groups have long argued that having more than one network available for routing holds down costs for consumers while companies that take fees for processing such transactions, including card networks and banks, have said that’s not necessarily the case.


The Strawhecker Group (TSG) and the Electronic Transactions Association (ETA) surveyed over 500 U.S. SMBs in April to understand how the COVID-19 pandemic is currently impacting SMB operations and payments acceptance, and how the market compares to April 2020.

Download the full 35-page report. The report helps the payments industry understand how to best support the SMB community as they continue to manage the pandemic, while moving towards a goal of greater recovery. 

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