There has been big news recently about the proposed plan to cut the fees that retailers pay to banks each time a customer uses their debit card. This news has caused quite a stir in the financial services industry and organisations involved on both sides of the argument are going to great lengths, financially, to convince lawmakers that they are only doing what is best for the American public.

Retailers have claimed have that these proposals are nothing but a gift from to the banking industry and many retail groups are claiming that the plans to postpone the fee reduction is nothing more than yet another bailout for the already much maligned banking sector. However, financial analysts and banking experts have said that the fee reduction is like the retailers receiving a $12billion dollar gift.

Caught somewhere in the middle of all this are the consumers. As it stands John and Jane Doe have a pretty low opinion of the banking sector at the moment but having said that, they aren’t too hot on the retailers either during times of economic hardship. Whilst conflicting surveys from retail groups and banking sector analysts have proved to be contradictory, the planned proposals are still very much up in the air for all concerned.

Some people have gone on record claiming that are sick of the way banks have treated them over recent months and see this as another kick in the teeth of consumers from the large financial institutions. Some consumers have even threatened to stop using their cards all together, opting instead to use cash transactions only.

More of a concern for the general public is how all this will affect them. A cut in fees could result in a wide range of debit card perks and discounts for many consumers. This would happen because retailers would be greatly encouraged to try to get customers to use their debit cards as opposed to using their credit cards. This could see discounts for debit card users at gas filling stations, as well as increased loyalty rewards and savings on luxury purchases.

The down side of all these savings that consumers can expect to be charged higher bank fees as the banks look to make up for the lost revenue from the debit card transaction fees. The reduction in fees could also see a cut back in banking services such as telephone and online banking. The alternative to these cut backs is consumers being charged extra to make up for the shortfall created by the loss of debit card fees.

Despite the uncertainty and potential extra charges that consumer could end up receiving when using their debit cards, it would appear that debit card usage is actually on the increase and this has been the case since 2009. Despite the recent economic crisis, many experts claim that debit card use is preferred by consumers who see it as a good way of making sure that they are able to live within their means.