Banks are test driving yet another fee.
Starting in October in five states, Wells Fargo will charge customers $3 per month if they use their debit card for purchases or payments. Customers can avoid the fee if they don't use their card or by signing up for certain checking accounts.
The guinea pigs will be customers who opened business and personal accounts in Oregon, New Mexico, Nevada, Georgia and Washington. The test won't affect customers in North Carolina and South Carolina unless they originally opened their accounts in one of those states, Wells spokesman Josh Dunn said.
ATM withdrawals won't trigger the fee.
No decision has been made on whether to expand the pilot program, he said. Wells Fargo bought Charlotte's Wachovia in 2008 and is converting North Carolina bank branches to the Wells name this fall.
The move comes as banks are bracing for lost "swipe fees" that merchants pay banks when customers use debit cards in their stores. As a requirement of the Dodd-Frank financial reform law, the Federal Reserve in June capped these fees at about 21 cents per transaction, down from an average of about 44 cents per transaction. Banks lobbied fiercely to delay or jettison the provision.
Wells Fargo isn't the first to institute such a charge and won't be the last, said Greg McBride, senior financial analyst at research firm Bankrate.com.
"The result of the change in the debit card interchange rule is that consumers get stuck with the bill," McBride said. By implementing new fees, banks are saying the cap on swipe fees is at or below their cost of the service, he said, "although there is no way to know if that is the case or not."
New York-based JPMorgan Chase has been testing a similar $3 per month charge in northern Wisconsin since February, a bank spokesman said. Only one of the bank's four checking account options includes the fee. No decision has been made on whether to expand the program.
Charlotte-based Bank of America isn't testing a debit card fee, but is "evaluating pricing across all our payment products," spokeswoman Anne Pace said. The bank is redesigning its product offerings so customers clearly know what they're getting and how much it costs, she said.
In the wake of the new limits on swipe fees, some banks are also curtailing debit-card rewards programs. Wells stopped enrolling customers in debit-card rewards programs in March.
In their test programs, banks will closely monitor customer attrition, McBride said. Some customers who pay close attention to fees will "vote with their feet" and close their accounts. Others will pay the fee to avoid the inconvenience of opening new accounts and transferring bill payment information, he said.
Dunn, the Wells Fargo spokesman, said the bank regularly reviews its pricing "to take into account the needs of our customers, industry trends, the market competition and our cost of doing business."
Wells' debit cards offer value to customers, he said, because they are an easier payment option than cash or checks, provide 24-hour access to ATMs and come with fraud protections.
Wells has also made changes as part of its Wachovia merger. The bank eliminated ATM fee waivers that some Wachovia customers once received in some accounts.