Whether or not this particular story is true, there is a structural problem with debit transactions. Neither merchants nor consumers should be penalized for electronic transactions in which credit is not involved. Perhaps this means that the infrastructure of bank cards, which was predominantly spread by credit card companies, would fall on vendors and banks, but my guess is that they would benefit enough from the increased liquidity that they would want to create such a system.
Levying a 5-7 percent tax on vendors is simply unfair, when profit margins, particularly on less expensive items are often less than that.
There is still reasons that debit transactions should attract a charge. There is definitely still fraud risk as well as comms/infrastructure/support. 5-7% is high, but 0% is also unrealistic.
Debit cards issued by banks without any involvement from credit card companies are prevalent in many countries, including Canada and Germany. In Germany, the fees for electronic cash transactions are 0.3% with a minimum of 8 cents.
Levying a 5-7 percent tax on vendors is simply unfair, when profit margins, particularly on less expensive items are often less than that.