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US appeals court upholds cap on 'swipe' fees

Retail group lost a lower court ruling that would have lowered how much banks can charge businesses for debit card use.
By MARCY GORDON, AP Business Writer, AP Business Writer Published: March 22, 2014
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A federal appeals court has overruled a coalition of retail groups that challenged the Federal Reserve’s cap on how much banks can charge businesses for handling debit card transactions.

The ruling issued Friday by the U.S. Appeals Court for the District of Columbia overturned a lower court’s decision in July that favored the merchants and was a setback for banks.

In the July ruling, a federal judge struck down the Fed’s cap on so-called “swipe fees.”

The retail groups sued over setting the cap at an average of about 24 cents per debit-card transaction.

Before to the cap, fees averaged 44 cents per swipe.

Associated Press