Now that we have a ruling on debit interchange, I wanted to remind you that debit cards, used in place of checks, remain a significant advantage to the bank, apart from any interchange fees you receive. The transaction itself (especially if we look at average dollar transactions) is less expensive to process, and the long term impact of storage and retrieval (essentially an 80 to 100 byte record vs 25 to 50 thousand bytes for checks) is greatly reduced. While your interchange fees will drop, as a result of the cap on interchange, imposing fees for debit card use constitutes an economic barrier to acceptance that sends the wrong message to your customers who have already embraced debit cards. Due in part to costs, you may need to reduce or eliminate rewards programs associated with debit cards, but these are not the only driver of customer use of debit . . . convenience and purchase protection are equally important. In terms of incentives, take time to re-evaluate simple utilization incentives, perhaps partnering with merchants, that will serve to build more volume for your debit card program.
Long term, electronic transactions are the way to go, and you want to continue to foster that mentality. Let's not overreact and destroy the benefits we've built with debit cards.