Small business owners call for credit card reform
Florida small business leaders and national credit card swipe fee experts held a conference call this morning to address what they consider to be excessive and unfair fees imposed by major credit card companies for credit card transactions-- fees they say the credit card companies donâ€™t want the public to know about.
Bruce Mitchell, the owner of Rally stores in Clearwater, is frustrated because of what he says credit card companies have been getting away with. According to Mitchell and other small business coalition leaders, major credit card companies like Visa and Mastercard have tripled their interchange fees, also known as swipe fees, over the last eight years. These are the fees charged to businesses every time a credit card transaction takes place.
These fees rival the costs of health care, wages and insurance for small businesses, decreasing their profits and lessening their chances of survival, critics say.
Jim Smith, president of the Florida Petroleum Marketers and Convenient Store Association, says this has been a big issue for those he represents.
Swipe fees also cost consumers. Businesses must charge more to absorb the costs incurred by the high number of credit card transactions used. Experts estimate consumers pay $427 per household a year. This is what those calling for swipe fee reform say the credit card companies donâ€™t want the public to know.
Doug Cantor of the National Association of Convenient stores says consumers are unaware of how much more they spend to cover the fees charged to businesses by credit card companies because the costs are embedded in the price of their purchases.
Swipe fees in the U.S. average about 2 percent of sales, meaning about $2 to every $100 spent, but they vary depending on the type of card used. Those rallying against the fees say the rate at which the fees are inflating is exorbitant, at a time when the cost of processing credit card transactions is declining.
Mallory Duncan of the National Retail Federation says the fees bring in billions of dollars a year to credit card companies.
The U.S. has the highest swipe fees of any country in the world, but it has not always been that way. With Master Card and Visa becoming such widely used means of payment, the companies have increased exponentially in power.
Small businesses arenâ€™t the only ones dealing with the burden of high interchange costs. Four Florida counties, Marion, Walton, Osceola and Brevard have recently stopped allowing citizens to use Visa to pay taxes or other fees, saying there isnâ€™t money in their budgets to cover the cost of the transactions.
Cantor, of the National Association of Convenient stores, says the business owners they represent do not have the luxury of not accepting major credit cards. They say, in order to be competitive, they must make various forms of payment available to customers.
Florida small business leaders are working to reform what they say are excessive fees, and to incorporate fairness, transparency and competition into the system.
Currently, there is legislation on the national level being introduced that, if passed, would allow merchants to collectively negotiate fees and rules with credit card companies. Another piece of legislation would remove the allowance of hidden fees to consumers.
For more information or to get involved, visit UnfairCreditCardFees.com.comments powered by Disqus