Durbin helped small business by limiting swipe fees
Morris
Daily Herald
May 21, 2010
Op-ed by: David F. Vite
Senator Dick Durbin went to bat for Illinois consumers and small businesses in a big way last Thursday and should be commended for driving the successful inclusion of an amendment as a part of comprehensive financial reform to limit the fees merchants pay in order to accept major credit cards. Outrageous fee increases hurt struggling Main Street businesses and prevent job growth.
Every time consumers swipe their VISA or MasterCard, card companies and their issuing banks charge the merchant an interchange fee, or swipe fee. Constantly escalating interchange fees have grown so out of control that small retailers could even be forced to close their doors should these increases continue.
Card companies inflate these fees simply because they can. More than 80 percent of all swipe fees are collected by the 10 largest banks, interchange fees have tripled since 2001 and in 2008 cost consumers and merchants $48 billion. Just last month Visa increased rates on debit transactions by 30 percent in the U.S. – with no change in service.
It is clear banks found another way to perpetuate their bad behavior, this time fattening their pockets on the backs of small businesses. Small retailers are being bullied and squeezed with these fee increases while the ability to grow their businesses and create jobs is jeopardized.
Senator Durbin’s amendment to the financial reform bill limits these fees on debit card transactions and would create a fair and reasonable electronic payment system that benefits all parties equally. The amendment only affects banks with $10 billion or more in assets, thus exempting community banks and credit unions.
We owe Senator Durbin many thanks for his commitment to reforming swipe fees, and allowing merchants to get back to serving customers, adding jobs and growing our economy without the worry of escalating swipe fees.
David F. Vite is President & CEO of the Illinois Retail Merchants Association
Senator Dick Durbin went to bat for Illinois consumers and small businesses in a big way last Thursday and should be commended for driving the successful inclusion of an amendment as a part of comprehensive financial reform to limit the fees merchants pay in order to accept major credit cards. Outrageous fee increases hurt struggling Main Street businesses and prevent job growth.
Every time consumers swipe their VISA or MasterCard, card companies and their issuing banks charge the merchant an interchange fee, or swipe fee. Constantly escalating interchange fees have grown so out of control that small retailers could even be forced to close their doors should these increases continue.
Card companies inflate these fees simply because they can. More than 80 percent of all swipe fees are collected by the 10 largest banks, interchange fees have tripled since 2001 and in 2008 cost consumers and merchants $48 billion. Just last month Visa increased rates on debit transactions by 30 percent in the U.S. – with no change in service.
It is clear banks found another way to perpetuate their bad behavior, this time fattening their pockets on the backs of small businesses. Small retailers are being bullied and squeezed with these fee increases while the ability to grow their businesses and create jobs is jeopardized.
Senator Durbin’s amendment to the financial reform bill limits these fees on debit card transactions and would create a fair and reasonable electronic payment system that benefits all parties equally. The amendment only affects banks with $10 billion or more in assets, thus exempting community banks and credit unions.
We owe Senator Durbin many thanks for his commitment to reforming swipe fees, and allowing merchants to get back to serving customers, adding jobs and growing our economy without the worry of escalating swipe fees.
David F. Vite is President & CEO of the Illinois Retail Merchants Association