Federal Reserve cuts card swipe fees

WASHINGTON -- The Federal Reserve said Wednesday that banks can only charge retailers 21 cents each time they swipe a debit card.

The board raised the cap from its initial proposal of 12 cents per swipe. Banks and big payment processors like Visa and Mastercard convinced the Fed that was too low to cover the cost of handling transactions, maintaining networks and preventing fraud. Banks currently have no limit and charge an average of 44 cents per swipe.

It does not apply to government-issued debit cards, prepaid cards or cards issued by banks and credit unions with assets under $10 billion. -- AP