Small Business Owners Gather in Nation's Capital to Fight the Swiping of America

Feb 04, 2010, 13:59 ET from Consumers for Competitive Choice

Main Street America says excessive swipe fees hinder job growth and unfairly raise consumer prices

WASHINGTON, Feb. 4 /PRNewswire/ -- Small business owners from across the country joined Consumers for Competitive Choice (C4CC) President Bob Johnson, Executive Director Jim Conran, and Jennifer Cavallaro, Owner of The Beehive Cafe in Bristol, RI in Washington, DC, today to discuss with Members of Congress the negative impacts of excessive credit card interchange (or "swipe") fees on their business.  Small businesses representing Main Street America shared personal stories and urged Congress to immediately reform these fees. The briefing comes on the heels of Visa and MasterCard earnings announcements. Visa posted a profit of $763 million for the quarter ending December 31 – up 33 percent from a year ago. In the last quarter, MasterCard's profit jumped 23 percent to $294 million.


"Credit card companies are notorious for the bad behavior and one of the worst abuses on their list is interchange fees.  These swiping fees are costing small businesses and consumers $90,000 a minute – every minute of every day.  This means less money for businesses to hire workers and higher prices for consumers across the board," Mr. Johnson said.  "Right now Visa and MasterCard are in a race against each other to charge higher interchange fees in order to give bigger profits to their big bank issuers.  I think the American people have already bailed out the banks enough – now it's time to help out small businesses and consumers."

"Visa and MasterCard's recent earnings announcements show they're making huge profits and will undoubtedly lead to big bonuses for company executives.  There is something fundamentally wrong with a system where these companies are flourishing on the backs of small businesses on Main Street who are forced to raise prices and cut staff just to keep the lights on," Mr. Johnson said.

"Throughout the last decade interchange rates have increased more than 300% - exceeding both health care and energy cost increases by a wide margin," Mr. Conran said.  "The rates have become excessive and are not reflective of the true cost of actually processing the transaction.  As these fees eat up potential profits for small businesses, it means fewer jobs and higher prices at a time when our country can't afford either.  With millions of people out of work, we can't ignore the fact that excessive interchange fees are stifling job growth on Main Streets across the country."

Supporters of the Credit Card Con – a project of C4CC – including small business owners, met with their elected representatives and provided firsthand accounts of many of the issues they face, both in good times and in bad.  In particular, merchants said that credit and debit/check card interchange fees hinder job growth and unfairly raise consumer prices.

"I am encouraged that such a diverse group of small business owners can come together from across the country to discuss a critical issue that hurts us all," Ms. Cavallaro said.  "I look forward to meeting with my representatives from Rhode Island to discuss ideas for reform that will help small businesses."  

Members of the Credit Card Con campaign are seeking reasonable fixes to the current system including:

  1. To bring debit card transaction fees down to a level where they are at par with personal checks.  Debit cards are a modern-day manner of delivering a centuries-old transaction.  There's no need for these interchange fees to be so high.
  2. Transparency in the way transaction fees are assessed and processed, including an easy way for merchants to promote cash-only discounts without fear of retribution from the credit card companies.
  3. Clear and direct federal regulatory oversight of interchange fees either in the Fed or through President Obama's proposed Consumer Financial Protection Agency (CFPA).  We want to make sure there is clear federal government oversight to protect small businesses.


Interchange fees are the charges that merchants, local governments, universities, or anyone else who accepts plastic, are assessed every time a transaction is completed by swiping or keying in a credit or debit card.  Credit card companies received $48 billion in these fees in 2008 alone; this represents a 300% increase in less than a decade.  Every dollar spent on interchange is a dollar not spent hiring workers or providing savings to customers. 

On May 22, 2009, President Barack Obama signed the "Credit Card Accountability, Responsibility and Disclosure Act of 2009," or "CARD Act," into law.  The CARD Act included restrictions on interest rates, limits on fees and tough restrictions to protect young consumers.  Unfortunately, the CARD Act did not address interchange fees.

The concern among small business owners on Main Street is that this loophole will be exploited by big banks and credit card companies.  Although the CARD Act will go into effect on February 22nd, Congress cannot consider their work on financial regulatory reform complete until interchange fees have been addressed.

About The Credit Card Con

The Credit Card Con is a project by the Consumers for Competitive Choice. 

For more information, visit The Credit Card Con website at

SOURCE Consumers for Competitive Choice