High swipe fees have been the bane of merchants in recent years, as costs soared. We got swipe-fee relief on credit cards earlier this year, but debit-card fees remained high.

Now, the Federal Reserve has proposed major cuts in debit swipe fees -- up to 90 percent. Banks are howling and will lobby hard for a reprieve, but real relief for retailers may be on its way. The Fed proposes cuts of up to 90 percent, much more than many on Wall Street expected. New rules are expected to finalize in April and take effect in July 2011.



Rather than the current debit-swipe system, in which card companies can charge up to 2 percent of the purchase price, the Fed says debit-card swipe fees should be capped at 12 cents per transaction. Period. 

That's a big difference -- for instance, a retailer would pay just 12 cents on a $100 purchase, instead of the current fee of around $1.50.

Some people still aren't satisfied with this proposal -- the National Retail Federation says it will continue to press for zero fees. Their logic: Debit cards are essentially just plastic checks, and paper checks aren't charged a fee. 

The NRF has a point there, but it's doubtful this dream could come true. Banks and credit-card providers need to make something to cover administration of their debit-card programs. And we do usually pay a small fee to order those paper checks, while banks issue debit cards free.

But the Fed proposal would still drop a lot of cash to many retailers' bottom lines, potentially enabling them to hire more, market more, and accelerate their business growth. We'll see if these deep cuts come to pass -- the Fed is taking comments from the public now. Expect financial-services firms to lobby hard against this one.

What do you think -- is the Fed's proposal enough, or should debit fees be eliminated? Leave your opinion in the comments.