Appeals court voids 21-cent debit swipe fee cap

What happened?

1. The court held the Board exceeded its authority under the Durbin Amendment by including costs not specific to individual debit-card transactions, the National Law Review reports
2. According to the National Law Review, the panel read 'incremental cost' to mean the extra expense of handling a single further transaction, and it determined that the cap wrongly counted in fixed outlays like software, hardware, labor, and network costs.
3. Additionally, the court determined that applying one uniform ceiling did not reflect the variation in transaction-specific costs across issuers, and it sent the matter back so the Board could create a fee structure that conforms to the statute.
4. According to the opinion, the ruling becomes effective once the appellate mandate issues, that is, after the window for seeking rehearing (or a denial of rehearing) has passed; meanwhile, the current cap stays in force.
5. The court observed that the Board might employ a proxy like average variable cost, provided it reasonably mirrors the incremental costs that issuers face.

Issuers, payment networks, processors and merchants are awaiting the Board's next steps.

A machine summary written from the reports listed below; read them for the full account. How summaries are made and what is checked.