Fed Proposes Dramatic Cuts to Debit Card Interchange Fees

The Federal Reserve Board proposed rules Thursday that may dramatically cut the interchange fees that banks charge merchants for debit card transactions.

The Fed suggested capping the fees at 12 cents a transaction. Currently, banks charge merchants 1% to 2% of the dollar value of the transaction.

Small banks would be exempt, as would issuers of government benefit debit cards and prepaid cards.