Bofa Debit Card

This article describe that Bank of America (BofA) plans to charge a $5 fee to customers that use a BofA debit card to make purchases. The change begins next year. BofA will charge the $5 monthly fee to debit card holders that use the card to make purchases. It won't be charged if the card is used only at ATMs or not used at all. The move comes as banks seek to recoup revenue lost because of new industry regulations.

http://www.bizjournals.com/charlotte/blog/bank_notes/2011/09/bank-of-america-to-charge-5-for-debit.html

Relation to Class Concepts:

This article is connected to our class discussion of stakeholder theory. The prime bank's stakeholders include employees, shareholders, customers, government, financial institution and society. Charge a $5 fee only pleased the internal stakeholders such as shareholders, but it did not capture the majority of stakeholders concern, which should include customers, society and the environment. This decision will displease customers of BofA, and finally will affect the customer retention of BofA.

Thoughts:

In the article, it mentioned that Banks ability to charge interchange fees to retailers, though under the new regulation, bank now can charge only on average 24 cents per card swipe instead 44 cents per transaction before. So still, drive customs to use debit cards is a way bank to reduce their branch and transactional cost, but now BofA want to charge those who adopted this model. I think charging customer is not a solution to recoup revenue. Customers in BofA have so many options to avoid this fee; they may write check more instead of using debit card which may increase the cost of BofA, or simply transfer to other banks who doesn't charge this fee.