More or higher fees for bank services.
That's what one local banker said is likely to happen with the implementation of a proposed rule the Federal Reserve issued Thursday on debit interchange fees.
The Fed's proposed regulation, called for in the Dodd-Frank Wall Street Reform and Consumer Protection Act, would cap the debit interchange fees at 12 cents a transaction.
Interchange fees are what banks and other card issues charge a retailer for a transaction using a debit card.
Consumer interest and merchant groups largely applauded the Fed's move Thursday.
But bankers such as Equity Bank's Brad Elliott said capping the interchange fee will force banks to look at imposing new fees or increasing others to make up for the loss.
Interchange fees "go to supporting online banking" and other costs of operating an increasingly electronic payment system, including high-tech anti-fraud systems, he said.
"By excluding or limiting that fee, banks are going to have to charge other fees to make up the difference," said Elliott, chairman and CEO of Equity. "It's just plain and simple."
"We lose money on most of these services today. This helped offset having free checking and... other services, so there will have to be changes made."
The Independent Community Bankers Association echoed Elliott's comments.
"This proposed rule confirms what ICBA has long warned: that government price-fixing of debit interchange will benefit big-box retailers while passing the buck on to consumers and disadvantaging community banks," Karen Thomas, ICBA's senior executive vice president of government relations and public policy, said in a statement.
But other groups such as U.S. PIRG, the federation of state Public Interest Research Groups, said in a statement that the proposed rule "will give millions of consumers a needed break. Lower swipe fees mean lower prices at the checkout counter. We welcome the Fed's continued attention to making sure consumers are protected under the swipe fee regulations."
The proposed rule is open for a public comment period. If it remains unchanged, it will take effect July 21.
The Fed said that according to its recent study of the payment system, debit card payments in the U.S. now exceed all other forms of noncash payments.