Creator: Joe Raedle | Credit: Photographer: Joe Raedle/Getty I
For many small businesses, the holiday season is an opportunity to increase revenue and reach a larger customer base. Up to 25% of a small business’ revenue comes from the holiday season.
As for consumers, this means using a credit card. However, they could be much less likely to reach for one should the points and rewards systems offered cease to exist.
For every credit card swipe, the retailer pays a "swipe fee" of 2-3%. The money goes to credit card companies and the banks that issue the cards to cover their processing and security costs.
Congress is considering the Credit Card Competition Act, a bill requiring dual-mandated networks for businesses to choose from. The intention is to reduce swipe-fee costs for businesses and consumers, but the reality isn't quite so.
This act would increase the cost for credit card companies to fight fraud due to the exhaustive resources required by the dual-mandated networks– meaning that point rewards could be on the chopping block, even for big card companies like Visa and MasterCard. This bill also requires that networks give away card security technology for free– eliminating all chances of security advancement in the near future.
The CEO of the Credit Union National Association, former congressman Jim Nussle, issued a statement earlier this year calling it "reprehensible that at a time when hard-working Americans are already feeling the financial pinch from inflation, big box bullies are pushing for financial breaks that would risk both the data security and access to credit for consumers and small business owners.”
While the legislation has bipartisan support in both the House and the Senate, this threat to your hard earned money could be coming by the end of the holiday season. Nearly 10,000 small businesses in Louisiana closed this year, and more could be on the way if this bill were to pass as it is written.
If you are opposed to the Credit Card Competition Act of 2023, contact Senator Kennedy and tell him to oppose Durbin’s bill.
Alton Phillips
Monroe, LA
