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NewsBriefs

This article contains excerpts from news stories recently posted under follows similar policies by Aldi and Whole Foods. Check
Breaking Industry News on our homepage. For links to these and other usage, at its peak in the 1990s, declined sharply during the
full news stories, please visit www.greensheet.com/breakingnews. pandemic as contactless payments like digital wallets and
php. peer-to-peer apps grew in popularity.

The Federal Reserve reported a 7.2 percent annual de-
cline in check usage since 2018, though the average value
of check payments has increased from $1,609 in 2015 to
$2,430 in 2021. While fewer places accept checks, they re-
main common for high-value purchases, such as cars, due
to lower transaction costs. Checks also offer users greater
control over their payments.

SCOTUS deals blow to Fed in Discover, merchants propose class-action settlement
debit interchange challenge
Discover Financial Services proposed a $1.2 billion settle-
The U.S. Supreme Court allowed a North Dakota merchant ment in a class-action lawsuit with merchants and acquir-
to sue the Federal Reserve over debit card interchange ers alleging overcharges due to "card product misclassi-
caps, even though the merchant opened after the statute of fication" from 2007 to 2017. The funds are earmarked for
limitations had expired. Historically, courts ruled the six- refunds. The misclassification, placing certain card ac-
year limit under the Administrative Procedure Act starts counts in the highest pricing tier, was revealed in a July
at enactment. 2023 earnings call by then-CEO Roger Hochschild, who
subsequently resigned. This proposed settlement aligns
In 2014, merchants sued the Fed over the Durbin Amend- with Discover’s efforts to finalize its acquisition by Capital
ment cap, but the Supreme Court declined to hear it. In One Financial Corp., a $35.3 billion all-stock transaction
2018, a North Dakota truck stop opened and joined a 2021 aimed at creating a global payments platform with 70 mil-
lawsuit against the cap. Lower courts dismissed the case lion acceptance points across 200 countries.
due to the expired statute of limitations. However, in July
2024, the Supreme Court ruled the period starts when a The acquisition, pending shareholder and regulatory ap-
business is injured by the regulation. The ruling clarifies provals, faces scrutiny due to the Biden Administration's
that the limitations period starts when a business begins stance on mega-mergers. The settlement pales in compari-
paying fees. son to a rejected $30 billion settlement involving Visa and
Mastercard, which would have reduced interchange fees
Taret says no to checks and altered merchant card practices. The judge in that case
deemed the savings insufficient and disproportionately
As of July 15, 2024, Target no longer accepts personal beneficial to small merchants.
checks at the POS, citing "extremely low volumes." The
retailer will still accept checks through its Target Circle Bankers to Fed:
Week sale and for mailed payments on Target Circle cards. debit interchange caps hurt consumers most
Customers can continue using various payment options
like Target Circle, credit and debit cards, cash, digital wal- The Consumer Bankers Association contested a Wall Street
lets, SNAP/EBT, and buy now, pay later plans. This move Journal article suggesting that bankers are overreacting
to a Federal Reserve proposal to reduce debit card inter-
change fees. The Fed proposed cutting the cap by 30 per-
Call me today! cent to 14.4 cents plus 0.04 percent per transaction, down
Let me help you from the current 21 cents plus 0.05 percent plus fraud pre-
with your vention costs.
advertising
success. This reduction, under the Durbin Amendment to the
Dodd-Frank Act, would lower fees on a $50 transaction
707-284-1693 from 24.5 cents to 17.7 cents. The proposal faced backlash
from banks, merchants and Fed Governor Michelle Bow-
man, who warned it could lead banks to raise fees, po-
tentially harming low-income consumers reliant on debit
cards. For example, a recent study commissioned by the
CBA predicted the new cap would increase annual bank
fees for consumers from $1.3 billion to $2 billion. The CBA
R R ick Aston urged the Fed to withdraw the proposal to avoid disen-
franchising low- to moderate-income families.
Senior Media Partnership Specialist
Rick@greensheet.com
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