Appellate court vacates debit card interchange fee cap
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U.S. debit card interchange fee rules apply to banks and financial institutions with deposits of $10 billion or more. The current cap consists of 21 cents per transaction, 0.05% of the transaction amount, and a 1-cent fraud-prevention adjustment. In 2023, the Federal Reserve proposed reducing the base fee to 14.4 cents, but the proposal has not advanced. On October 27, 2026, the U.S. Court of Appeals for the Eighth Circuit ruled that fixed costs unrelated to individual transactions should not be included when setting the cap, and vacated the current 21-cent fee cap.
AI-written from reports · updated 1 hour ago
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- Payments DiveSelectedU.S. Eighth Circuit Court of Appeals overturns Federal Reserve’s 21-cent debit card interchange fee cap
The U.S. Eighth Circuit Court of Appeals ruled that the Federal Reserve should not include fixed costs unrelated to individual transactions when setting the cap on debit card interchange fees, and vacated the current 21-cent rate cap. Current rules also include 0.05% of the transaction amount and a 1-cent fraud-prevention adjustment, and apply to banks and financial institutions with deposits of USD 10 billion or more; the Federal Reserve’s 2023 proposal to reduce the base rate to 14.4 cents has not moved forward.
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