A U.S. appeals court gave banks a victory on Friday when it overturned a decision that would have limited what financial institutions can charge businesses to handle debit card transactions.

The Federal Reserve had set a cap on those charges, known as “swipe fees,” at an average of 24 cents per transaction. Originally the proposed fee was 12 cents per swipe, but banks said they needed additional revenue to cover the cost of providing checking accounts and other services. Merchants claimed the fees are supposed to cover only the actual cost of the transaction.

Senator Dick Durbin (D-Illinois), who sponsored the amendment that set a cap on swipe fees, called the ruling by the appeals court “a giveaway to the nation’s most powerful banks and a blow to consumers and small businesses across America.”

However, financial institutions are still not completely satisfied by the caps. Carrie Hunt, senior vice president of government affairs at the National Association of Federal Credit Unions, said the Fed’s rule imposes below-cost caps on interchange fees and fails to provide for a reasonable return, according to The Washington Post.

The National Retail Federation, one of the groups that brought the suit against the Fed, said it was reviewing whether to appeal Friday’s decision.

Before caps were set, swipe fees varied greatly from store to store. Larger chains often paid lower fees than mom-and-pop businesses.

This is the latest battle between retailers and financial institutions. The Target data breach of late 2013 pitted the groups with each saying the other should do more to protect consumers’ financial data.

-Steve Straehley

To Learn More:

Court Reverses Ruling On Swipe Fees In Favor Of Banks (by Danielle Douglas, Washington Post)

US Appeals Court Upholds Fed's Cap on 'Swipe' Fees (by Marcy Gordon, Associated Press)

Judge Rules Federal Reserve Ignored Law to Help Credit Card Companies over Retailers (by Ken Broder, AllGov)