The Federal Reserve Board has dropped the requirement for merchants to provide receipts for debit card purchases of $15 or less.
The Fed's decision in late June changes the rules of Regulation E of the Electronic Funds Transfer Act. Proponents of the change say it will help make small-ticket card purchases more convenient for consumers and merchants. Critics say eliminating receipts will make it more difficult for consumers to notice and dispute inaccurate charges.
Regulation Z of the federal Truth in Lending Act that regulates credit card transactions does not include specific receipt requirements.
Regulation E had required merchants to issue a paper receipt to consumers for all electronic debit card transactions conducted at the point of sale. The Fed made the change because it "believes that receipts are of minimal benefit to consumers in small-dollar transactions," according to its written decision. The decision also notes industry reports that receipt requirements have hindered cashless transactions in some areas.
"For vending machines, for example, the costs associated with installing and servicing additional printing equipment capable of providing terminal receipts have been an impediment to offering cashless payment options," the Federal Reserve Board wrote. "For public mass-transit systems, the time required to provide each consumer with a receipt for debit card transactions at the gate or on a vehicle would cause delays that render the use of debit cards impractical in such circumstances."
Both MasterCard Worldwide and Visa USA reacted favorably to the news. "Eliminating the receipt requirement will make it easier for unattended merchants to [accept cards] because the cost of employing hardware is cheaper without a printer," says Niki Manby, Visa senior vice president for product innovation. "And consumers in these environments are so focused on convenience and not worrying about the change in their pocket, they don't even want a receipt."
A MasterCard spokesperson suggests that the decision could lead to increased merchant acceptance of contactless cards.
"It will certainly enable the [increased] use of PayPass as more merchants accept contactless payments," she says. If you're going through the subway line, its kind of hard to get a receipt."
However, Gwenn BÃ©zard, research director at Aite Group, the Boston-based consultancy, disagrees that receipts have hindered card acceptance for small payments.
"The receipt isn't really a barrier for merchants to accept low-value payments," he says, suggesting consumers may end up being short-changed with the decision. "Personally, I think the receipt is extremely annoying, but at the end of day it is the only way for consumers to dispute incorrect charges on the spot."
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