Warning: Higher Credit-Card 'Swipe' Fees Ahead
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Opinions expressed by Entrepreneur contributors are their own.Just what small businesses need right now: higher fees for accepting credit cards. Apparently, a settlement with the European Union to cap fees at a lower rate may see banks making up their losses by hiking rates here in the States, a retail trade group is forecasting.
The organization of major retailers, the Retail Industry Leaders Association, notes U.S. fees have tripled since 2001 to $48 billion, putting a damper on hiring. Last month alone, American swipe or "interchange" fees rose 30 percent. Now, charge-card issuers such as Visa and MasterCard need to make up their losses abroad somewhere...and the RILA fears that means in your merchant banking bill.
The RILA has been trying to get Congress off its duff on this issue to pass a federal reform bill, and is hoping the European settlement might spur them to action. If you're sick of fees so high your store loses money on small credit- or debit-card purchases, now's the time to call your representative to urge them into action.
"The announcement [of Visa Europe's settlement with the EU] leaves American businesses, small and large, asking why the same cannot be done here," the group said in a news release.
It'd be nice to have some parity on swipe fees. The Visa-EU deal capped interchange fees at .2 percent for four years. Meanwhile, here in the U.S., Visa's interchange rate for debit cards was .95 percent in April.
The group notes other countries including Canada, New Zealand and Australia have also already taken action to bring swipe fees back to sanity. Time for us to join the crowd.
RILA's government-affairs vice president John Emling says, "The U.S. is fast becoming the only industrialized nation in the world that allows our own banks to stifle business growth by indiscriminately setting rates far above the cost associated with the service provided."