The U.S. government has asked a federal court judge to keep current debit card swipe fees in place while it appeals his decision striking them down.
U.S. District Court Judge Richard Leon indicated that he would leave the fees in place while he reviews the request for a longer stay filed by attorney for the Federal Reserve. The Fed is asking a higher court to overturn Leon’s ruling that the Fed improperly relied on restricted financial data when setting debit card swipe fee caps. The Fed has set a 21-cent maximum charge on debit card swipes. The judge also ruled that the Fed’s rules limited competition in the debit card market, Bloomberg noted.
Debit card issuers took a financial hit when the Fed imposed the fee cap in late 2011. Prior to the cap, banks charged an average of about 50 cents per swipe, generating $16 billion in annual revenue from the fees.
Leon’s ruling is a potential boon for MasterCard (MA), which competes with market-leader Visa (V) in the debit card business. About $1.14 trillion in debit card charges over the past year were processed through Visa cards, compared to just $467 billion for Mastercard debit cards.
The Fed’s law was challenged by a number of retailers.
Shares of Mastercard were flat on Thursday midday trading, while Visa slipped modestly.