Opinion: Lower Credit Card Swipe Fees

by the Missouri Retailers Association
For years, credit card networks have charged swipe fees on every transaction made
with a credit or debit card.  These fees cost Missouri small businesses a fortune
every year. Last year alone, credit card companies swiped more than $48 billion from
small businesses across the United States. Thankfully, there's something happening
in Washington, D.C. right now that could change this situation for the betterment of
Missouri small businesses.  Unfortunately, credit card companies are trying to stand
in the way.

For most retailers, swipe fees have grown so high that they are now the second
highest cost of doing businesses. But unlike other business costs, merchants can't
take their business elsewhere. The problem is that Visa and MasterCard represent
more than 80 percent of the market.  The only option is to refuse to accept plastic
at all, which is not an option in today's world.
by the Missouri Retailers Association
The costs associated with debit transactions are particularly frustrating.  It is
amazing that in a 21st century economy, it is less expensive to process a paper
check than it is to process a debit card transaction.  In fact, it is exponentially
more expensive to process a check card than a paper check.  Can you imagine paying
more to send an email than to mail a letter at the post office? Swipe fees are
higher in the U.S. than just about anywhere else in the world.  Merchants pay no
swipe fees at all in Canada.  Swipe fees have become a lucrative source of pure
profit for credit card processors, at the expense of merchants large and small
trying to pull out of a recession.

Thankfully, last year the U.S. Congress recognized the system is fundamentally
broken and passed a law to ensure debit swipe fees "reasonable and proportional" to
the cost of debit transactions.  This was a huge win for small businesses.  Recently
the Federal Reserve, which is tasked with implementing these reforms, proposed rules
that will surely save small businesses and their customers' money in the years to
come.  But we cannot celebrate yet.  The Federal Reserve process is not complete,
and perhaps more troubling, the credit card industry is looking for allies in
Congress to help them undo the reforms and protect their swipe fee boondoggle.

The same interests that nearly collapsed the U.S. financial system are pushing
Members of Congress for another bailout, this one at the expense of small business
owners.  If they are successful in doing so, billions of dollars that would
otherwise be used to reduce prices for consumers or to hire more workers, will
instead be siphoned from Main Street to pad the deep pockets on Wall Street.

Small business owners have fought too hard for too long for these reforms just to
have them undone by deep pocketed credit card interests.  That's why small business
owners and consumers are counting on Congress, specifically Senators McCaskill and
Blunt to ensure the reforms passed by Congress are implemented on time and as
written.