Consumers who use debit cards instead of credit in an attempt to reduce debt may soon be helping out the restaurants they visit, thanks to a new rule from the Federal Reserve Board that will be enacted later this summer.
Restaurants are expected to benefit from the new, lower swipe fee rules more than most other businesses because of the large amount of debit transactions they process, according to a report from the Associated Press. In a new note from KeyBanc Capital Markets, it was revealed that the average restaurant conducts about 35 percent of its business on customers' debit cards, and the lower fees will mean increased profits which, in some cases, may become significant.
Profits for restaurants will likely increase between 1 and 4.5 percent, with restaurants that have less expensive menu items likely to benefit the most, the report said. Some could even pass the lower prices they pay for processing transactions on to consumers.
The rule will cut debit card transaction fees charged by credit networks to just 12 cents per purchase, down from the current average of 44 cents.