"Congress needs to keep their promise to small business owners and see that these reforms are enacted now." – Dennis Lane, Small Business Owner
WASHINGTON, May 10, 2011 /PRNewswire-USNewswire/ -- More than 50 small business owners from across the country descended upon Washington, D.C. today where they distributed free coffee outside metro stations during morning rush hour to remind Congress about the need for immediate debit card swipe fee reform. Following the coffee drive, they marched to Capitol Hill to conduct face-to-face meetings with their elected representatives.
The small business owners urged members of Congress to follow through on promises to fix a system currently monopolized by big banks and credit card companies. These companies charge so much to process a debit card transaction that when a customer uses their card to buy a small ticket item – like a cup of coffee – small business owners actually lose money, so they might as well give it away for free.
"Under the current system, I lose less money just giving the coffee away. I think there is something really wrong with that," said Dennis Lane, 7-Eleven franchisee and National Spokesman for Reform Swipe Fees NOW! "This imbalanced system is squeezing small businesses across the country; meanwhile the guys at Visa and MasterCard just posted second quarter earnings that grossly surpassed expectations… and they say they can't afford to reform the interchange system and give us a fair shake."
Last year, Congress passed and the President signed into law important bipartisan reforms aimed at fixing the current interchange system, as part of the Dodd-Frank Act. As a result, new rules requiring that debit card swipe fees are reasonable are set to take effect this summer-but the big banks and credit card companies are fighting hard to protect their cash cow, by seeking delays.
Now, Congress is considering legislation in both the House and the Senate that would stall these reforms before they even take effect–a move that would cost small businesses and consumers $33 million per day, $1 billion per month, and $13.5 billion each year.
Some members are even asking for informational studies on the economic impacts of swipe fee reform. However, two studies were recently completed that clearly demonstrated the negative impact swipe fees have on businesses and consumers. First the Government Accountability Office released a study in November 2009 that found Visa/MasterCard's market power problematic and also that swipe fee reform would benefit consumers. And former U.S. Under Secretary of Commerce for Economic Affairs, Dr. Robert Shapiro, estimated excessive swipe fees cost consumers and merchants about $26.9 billion in 2009 alone, money that otherwise could have created nearly 250,000 jobs.
"One year ago Congress made a promise to small business owners and consumers that Wall Street's bullying would stop. They made a promise that the days of unreasonable swipe fees that could increase at any time for any reason, would end – and that meant something to me and to concerned folks just like me all over the country," Lane continued. "Congress needs to keep their promise to small business owners and see that these reforms are enacted now."
For small business owners across the country, properly implementing these reforms means an opportunity to grow their businesses, offer better pay to employees, and pass savings on to their customers. With national unemployment back at 9 percent, these benefits couldn't be more critical.
About Reform Swipe Fees NOW!: Reform Swipe Fees NOW! is a project by the Retail Industry Leaders Association (RILA). The project unites U.S. business owners, small and large, in a campaign for fair debit and credit card swipe fees.
SOURCE Reform Swipe Fees NOW!