MARIETTA — A law set to go into effect July 21 that would lower and cap the fees retailers pay to banks for debit card transactions has banks and retailers at odds, and one local banking expert said the changes could even result in consumers being charged for debit card services.

“Banks are able to offer a lot of these services now for free that they won’t be able to if this law goes into effect because there are a lot of costs to the banks that won’t be covered by the new fee,” said Steve Bridges, executive director of Vinings-based Community Bankers Association of Georgia. “It will ultimately harm the consumer because the banks will have to make up for that lost income somewhere.”

But Georgia Retailers Association President Richard McAllister said reform could actually save consumers and retailers more than $1 billion a month, because retailers would be paying less to the banks and thus lowering their retail prices.

The Wall Street Reform and Consumer Protection Act was signed into law by President Barack Obama last July. Senate Majority Whip Dick Durbin, an Illinois Democrat, proposed an amendment that was ultimately passed last May known as the Durbin Amendment, which sought to reform debit card swipe fees, also known as interchange fees. The amendment statement said its purpose was to “ensure that the fees that small businesses and other entities are charged for accepting debit cards are reasonable and proportional to the costs incurred.” Big banks will be forced to lower their per-swipe fees to retailers by an estimated 70 percent and charge a maximum of 12 cents.

According to McAllister’s group and the National Retail Federation, banks charge an average of 1 to 2 percent for debit cards and 2 to 3 percent for credit cards each time a card is used to pay for a purchase.

“The fees have tripled over the past decade to about $50 billion a year, and drive up prices paid by consumers by an estimated $427 for the average household. Debit cards account for about $20 billion of the total,” according to a press release sent out by the groups.

Lisa Rieves, co-owner of the Smyrna women’s boutique The Honey Bee near Atlanta and Concord roads, said the upcoming changes posed as “good news.”

But while Rieves said debit card fee regulation would lower her bills and could possibly change the way she does business, the real stickler for her and many businesses are swipe fees mandated by credit card companies.

“It’s averaging about 7 or 8 percent that we have to pay to credit card companies per swipe,” Rieves said. “And American Express is so much more expensive than any other. It’s not double, but it’s definitely a lot more. We accept it because we know people like to use the points and we just have to grin and bear it, but many businesses don’t just because the fees are so high. The debit card fee changes will help us, but it would be a lot better if they pushed for credit card fee changes.”

The GRA and NRF launched a series of radio advertisements on Friday, thanking Georgia Sens. Saxby Chambliss and Johnny Isakson for their support of swipe fee reform. But while Isakson and Chambliss both voted in favor of the Durbin Amendment last May, both voted against the House resolution as a whole in July. Isakson said he ultimately opposed the measure because it failed to protect small businesses from “over-reaching regulation” and exempted Fannie Mae and Freddie Mac — “two of the biggest culprits” — from increased regulation and oversight.

Bridges said there is no guarantee retailers will lower the costs of their goods and services if swipe fees are lowered, and while big banks are leading the fight against the act, small banks will be left to compete with the bigger banks and major credit card companies to keep their debit cards cost-competitive.

“In the market place, it just won’t work because retailers are allowed to discriminate on which cards they will take and you will also see large retailers driving people to other cards or to the lowest card,” Bridges said. “If you’re a large retailer with more market power, why wouldn’t you drive your customer base to use Bank of America if it’s only going to charge 12 cents and local banks’ interchange fee are going to be more than that? Those cards aren’t going to be as susceptible as they once were.”

Bridges also said credit card companies, such as Visa and MasterCard, will either have to come up with a two-tiered rate plan for big banks and small banks offering their debit cards, or likely simply go with the big banks.

And in today’s consumer market, especially when it comes to consumers in their 20s and 30s, offering a debit card is an essential service for any bank, Bridges said.

“For community banks to be competitive and get younger customers, they can’t afford not to offer a debit card program,” Bridges said. “But if this plays out as we anticipate it will, there will be changes. They’ll do away with free checking, maybe implement a monthly debit card fee, maybe say you get three transactions for free but then charge per item. Small banks are kind of in wait-and-see mode, but many big banks have already announced they will start charging fees for services. They’re not telling the customer necessarily that it’s because they can no longer charge the interchange fees they once were, but they have told others that the fee regulation is part of that decision.”