This post is a guest column submitted by Pat Fontaine, Executive Director of the Mississippi Hospitality & Restaurant Association.
While swipe fees often go unnoticed by consumers, business owners are all too familiar with these charges that come every time someone swipes, taps, or inserts their credit card. More times than not, swipe fees are the second largest operating expense after labor, and they keep going up thanks to Visa and Mastercard and their desire to expand their already sky high profit margins. These two companies control over 80 percent of the credit card payments market, and without anyone to challenge them they’ve continued to raise fees and push merchants to the limit. Every time fees go up, business owners are forced to raise prices, and that inevitably makes it harder for Mississippians to afford everyday necessities and alienates customers from shopping at their favorite stores. Here in Mississippi, over 46 percent of employees work at a small business. We can’t afford to let swipe fees threaten their livelihoods, which is why the Senate should pass the Credit Card Competition Act (CCCA).
This CCCA is a smart, targeted solution to a long-standing problem in the credit card industry. Instead of relying on heavy regulation or government price setting, it tackles the issue of rising swipe fees by introducing real market competition. By giving merchants the option to route transactions through more than one network, it would provide competition and motivate Visa and Mastercard to lower swipe fees, relieving both business owners and consumers. This simple change has the potential to drive down fees naturally—just by letting the market work as it should. When the time comes to vote on the CCCA, I encourage Mississippi Senators Roger Wicker and Cindy Hyde-Smith to help carry it over the finish line. Our Senators have always looked out for small businesses, and they need this legislation now more than ever before.
17 comments:
Yeah, "conservative" CHS and RW are gonna do what their corporate donors tell them to do... And those donors ain't gonna want them voting for this Act...
I don't have a dog in this fight other than the extra fee a merchant tacks on to my purchase when using a credit card. Most still don't tack on the fee, it's just hidden in the price of the goods and services. What people seem to forget is that these fees allow the credit card companies to give the consumer an interest free 30-day loan until interest starts accruing. If you pay off your credit card every month, they don't make any interest off of you. Here's an idea - lower or even eliminate the swipe fees and start charging interest on the purchase date. A win for the merchant and a win for the consumers through lower prices since the swipe fee is no longer incorporated into the price. If I went to a bank and borrowed $250 they wouldn't wait for 30-days to start charging interest, why should the credit card companies be any different?
I'm not encountering swipe fees.
* * *
[/uses cash for purchases].
How about a 2% swipe fee that goes directly to pay down national debt?
I guess people forget the point of a "convenience fee"...
Just unleash digital currencies. America is so third world when it comes to cashless payments. This is due to regulation. American big brother can’t stand not knowing what you are doing with your money.
I'm highly skeptical of any legislation with Dick Durbin's name on it.
A Democrat of the worst order!
If business are so unhappy about the fees then they have a choice to stop taking credit cards. Even if there were no swipe fees the consumer would never see the savings It would only increase profit for businesses
Agree with 09:42. Some places offer a cash discount.
Cash and carry. I carry cash and that's why I carry.
Scare the Banks and the Government - use cash
@ 9:53
That's called "federal income tax" and it is much higher than 2%
To me it seems using cash is more of a inconvenience than a card. It's just another way to siphon off more money for useless things. Charging us more to use our money is bullshit. We get taxed when we get paid, taxed when we buy something now more of a tax to use a card. It's bullshit.
Who is big brother in your senerio?
Always refreshing to hear an opinion from an independent association focused on what's best for the public and not the industry.
Big brother/Uncle Sam is always the same. That's the government if you don't know.
Sarcasm award of the year!
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