credit card swipe fee reduction proposal

signed in July that requires the Fed to limit these interchange fees to a level "reasonable and proportional" to what it costs the bank to process the transaction.
The intent of the legislation is to lower the cost for merchants, which, in turn, would hopefully result in lower prices on goods and services for consumers.
This is obviously good news for retailers, who fought hard for it. But this is very bad news for banks. These rules will slash debit card revenue that was almost pure profit for the banks.

Merchants are charged an interchange fee each time a debit card is swiped. Card processors such as Visa(V_) and MasterCard(MA_) pass on the majority of this fee to the banks. The fee is set by the card network. The average fee is about 2% of the transaction value. A $200 purchase with a 2% interchange fee generated $4 for the bank; the new rule reduces the fee to 12 cents.

The National Retail Federation estimates that debit card fees total about $20 billion annually. Bank of America, the biggest issuer of debit cards, said earlier this year that the fee limits could cost the bank between $1.8 billion to $2.3 billion annually.