Card issuers must enable their cards to be processed on at least two networks regardless of whether they are used in-store or online. In addition to online transactions, retailers’ ability to route in-store transactions has been limited by the increased use of mobile apps and contactless cards to pay for purchases because neither allows for the use of a PIN, said the Fed.

“When Congress said routing was up to merchants, that meant wherever the purchase was made, not just in stores,” NRF vice president for government relations, banking and financial services Leon Buck said. “With the accelerated shift to online spending during the pandemic, this issue is more important than ever.”

Buck said that the lack of routing ability has cost retailers billions of dollars, and that is an added expense that small businesses cannot afford as they work to recover from the economic impacts of COVID-19. “NRF has raised this issue with the Fed repeatedly, and we are glad to see the Board of Governors take action. This move will help bring about the competition that is needed to bring these fees under control. Card processing costs ultimately drive up the prices for consumers and cannot be allowed to continue to grow.”

Fibre2Fashion News Desk (KD)