@creative1 The fees are indicative of a larger issue. Remember: the Durbin Amendment does not incur debt on behalf of the banks, it only reduces the amount of profit banks make off of debit cards. Thus in a very real sense, there is no actual cost for them to be passing on. Every time corporations claim to have been forced to increase prices by the government, they are lying. This is a choice that they have made. There was also the option of changing their bottom line.
Why should they do so? This movement is the answer: because the alternative is to lose business. That answer only applies, however, when ordinary consumers are willing to take hold of their market power. Your post effectively asks us to forfeit that power in advance—and many people have been tricked into doing exactly that over the course of history. One thing the information age has wrought, though, is a public more easily educated about how market equations work; and with this comes a pubic more able to wield its market power effectively (exactly the way a free market is supposed to work).
By abandoning the large banks, we show that this is the final straw. Even if credit unions do introduce new fees—and they also have a choice, so they may not all do so—we still have a market decision to make. If we continue to withhold our business from the large banks, we encourage them to change their practices. We show that we as customers do not care only about our bottom lines and that we expect the same from them.
Some people do only care about their personal bottom lines, of course, and that is their market decision to make. That’s why the bank transfer movement is described as a way of voting with money (as well as protesting with money). Everyone makes their decision, and then we see if the transfer movement received enough “votes” to influence the market.
If the big banks change their policies, other banks will follow (this is why it makes sense to boycott a market leader in favor of its competitors even if those competitors are objectionable in a similar way as the market leader). Alternatively, a market may be created for a different kind of banking institution (especially if the credit unions throw their lot in with the big banks on this issue). If the movement is unsuccessful, however, then we will see no major changes. Given that failure is no different from not acting in the first place, it’s rather risk-free for us to attempt this protest.
As for credit unions finding their cards rejected, it all depends on the size of the business. Many companies simply cannot afford to refuse debit card usage. Small businesses that deal in special commodities might go back to accepting cash only, but grocery stores can absorb the charges without suffering too much.
Moreover, a mass transfer to credit unions will change the situation such that they will not need to control their bottom line through charges to either merchants or consumers. That’s the advantage of having a lot of customers—an advantage that has previously been wielded by large banks, but that could be yielded by credit unions if this movement has even moderate success.
Composing members:
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Composing members:
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