If most senators get their way, merchants that accept debit cards could soon get a price break. Whether consumers would benefit is a matter of debate.

On Thursday, the Senate voted 64-33 to amend the latest financial services reform legislation to limit interchange fees, transfer fees paid for by merchants to cardholders’ financial institutions each time shoppers pay with plastic.

The amendment seeks to rein in transaction fees for debit cards issued by banks (excluding small financial institutions) by bringing them under the purview of the Federal Reserve; the Fed would be given a mandate to make fees “reasonable and proportionate.” The measure, which was introduced last week by Senate Majority Whip Richard Durbin (D., Ill.), would also strip away certain provisions from Visa (V) and MasterCard’s (MA) contracts that prevent merchants from offering discounts for using debit cards or paying with cash and setting card minimums.

Whether the amendment becomes law now hinges on passage of the Senate’s broader financial reform package and support for the measure in bicameral negotiations. (The House financial reform bill passed in December did not include the restriction on interchange fees.)

For years, businesses large and small have complained that interchange fees have risen beyond reason. Not only have more shoppers begun using plastic — many now use debit cards as a cash replacement – but in many cases, the price of acceptance has risen. Visa’s domestic credit-card interchange rate rose from between 1.25% and 1.91% in 1991 to between 0.95% and 2.95% in 2009. Over the same period, MasterCard’s rate also jumped from between 1.30% and 2.08% to between 0.90% and 3.25% last year, according to a 2009 Government Accountability Office (GAO) report about credit cards. Processing fees have also been added to debit-card purchases, which in the past were free for merchants to process.

Supporters of the measure, which include business associations such as the National Retail Federation and the Merchants Payment Coalition, say the move would benefit businesses and consumers.

“Higher interchange fees for businesses mean higher costs for retailers and consumers,” Durbin said in a statement. He added that banks now make billions of dollars from the fees.

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