Small Business Owners Lobby to Cut Credit Card Processing Fees
November 12, 2008 by Matthew Hunt
This is an article written in New York Times Small Business section and address US merchant account concerns address ever increasing credit card processing fees, but I think it is an article that speaks also to Canadian small business owners.
The article is called: Small-Business Owners Lobby to Cut Credit Card Fees and it is well worth the read. Some of the highlights and quotes from this article that I thought could spark some real conversations among Merchants are:
“In 2007, merchants paid $61.56 billion in electronic payment fees, up from $48.58 billion in 2005, according to the Nilson Report, a payment systems industry newsletter. The report estimated that lenders took in 82.5 percent of those dollars.”
These are the US numbers and assume as being the US northern neighbor that we are most likely not that far behind in our electronic payment fees.
“What merchants are getting for their money is convenience, risk management and guaranteed payment,” said Denise Dunckel, a spokeswoman for Visa Inc.
What do you think of this above statement made by the Visa representative?
“Merchants derive significant gain from the electronic payments system, which has evolved new features such as rewards programs,” said Trish Wexler, spokeswoman for the Electronic Payments Coalition, an advocacy group in Washington. “Ultimately, merchants benefit from rewards programs because people buy more when they use cards. Higher fees for rewards cards are justified because merchants and consumers both share in their expense — but merchants want to pass their fair share to consumers, who’d be hit with higher credit costs and reduced rewards if the merchants succeed.”
I am sure this above statement would get a ton of Merchant’s blood boiling, but I don’t want to speak for merchants – what do you think?
Kenneth J. Clayton, director of card policy for the American Bankers Association in Washington, called the bill “a dramatic proposal by big retailers to use political muscle to lower their costs.” Smaller retailers, he said, “are being put up as poster children to show how challenging it is for them. But behind the scenes are big-box stores that see an opportunity to lower their costs of participating in the electronic payments system that benefits them greatly.”
This is interesting, is this “movement” really just a big conspiracy for greedy large corporations to increase their bottom lines and increase share holder profits?
Just some food for thought. Regardless of the outcome, our current society in Canada and the US are greatly tied to using plastic and credit card processing is not going anywhere. This I am assuming will continue to be an ongoing battle between Merchants, Visa, MasterCard, and the Credit Card Processing Companies.
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