Swipe fees hurt businesses

These days, small businesses struggle more than ever to stay open, with a rocky economy and faltering consumer confidence. Exorbitant debit-card "swipe fees" that big Wall Street banks place on every single transaction we have stresses our business even more, and is putting us on a path toward having to close shop.

Big banks justify their "swipe fees" as necessary to cover costs, yet research has shown that the actual cost of processing these transactions scarcely exceeds one cent -- but the fees exacted by big banks and credit card giants amount to a $14 billion loss for merchants.

These "swipe fees" serve no other purpose but to allow gigantic banks to continue lining their pockets on the backs of hard working middle-class Georgians.

That $14 billion is an exceptional cost on small businesses. With that amount of money saved we could expand inventory, lower prices and hire additional employees to serve customers. These swipe fees are covering far more than the costs of facilitating the transactions -- which has even been admitted by card issuers while they lobby to increase their strangle hold on small businesses.

AS IF THE NEGATIVE impacts on small businesses weren't enough, big banks now are threatening our state government that they will stop issuing free debit cards for welfare recipients if swipe fee reform is upheld. The banks and state government are expecting small businesses to subsidize free debit cards for welfare recipients, despite that we already pay more than our fair share through property taxes, income taxes, sales taxes, payroll taxes, etc.

We shouldn't be saddled with ridiculous swipe fees under the excuse that they keep free debit cards available to our state government. This not only hurts governments, it hurts consumers who are forced to shell out more money with each transaction to satisfy the appetite of the Wall Street banks. Swipe fees don't bankroll state programs -- they pad the banks' bottom line.

Big banks wish to delay swipe fee reform for as long as possible to continue receiving their egregious profits. One Wall Street bailout was enough. Is the government really going to drive us into the ground by placing this burden on Main Street's back?

U.S. Sens. Johnny Isakson and Saxby Chambliss recognized the stifling effect these excessive fees have on small businesses when they voted for swipe fee reform. Both have their priorities straight.

JUMP-STARTING OUR economy by removing unnecessary obstacles to small-business success is clearly high on their agenda than securing hand-outs for Wall Street fat cats. Chambliss and Isakson deserve thanks and praise for sending a clear message that the interests of Wall Street must not trump Main Street.

As a small-business owner, I know firsthand how detrimental it is to raise prices to cover swipe fee costs. It harms me and it harms my customers. The more I can lower my costs, the more competitive I can be and the more goods and services consumers can afford.

If we continue to be constrained by swipe fees, the notions of growing, adding jobs and even maintaining the positions we currently have all get called into question.

(The writer is president of Pacer Fuels and past-president of the Georgia Association of Convenience Stores.)

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