Banks and credit unions have opposed swipe-fee reform, saying it will be painful to their operations and cost hundreds of thousands or even millions of dollars in lost profits. Such a dramatic loss will lead to increased bank fees to compensate, they say.
But the Senate voted down the legislation Wednesday (the vote was 54-45 in favor of the amendment, but it required 60 votes to pass). Both Minnesota senators voted against it.
“It is proof that main street USA can still beat Wall Street,” said Channing Smith, the owner of The Corner Store in Inver Grove Heights. “It gives any business out there encouragement to know that there is a better tomorrow ahead for them.”
“Everybody wins because it’s money back into the economy,” said Ted Brausen, owner of Brausen Auto in Roseville and Blaine. “It’s been a long time since somebody has taken care of small business.”
Dennis Lane, a Massachusetts 7-Eleven franchisee and the national spokesman of the Reform Swipe Fees NOW coalition of small businesses, said the vote was a message that the government “bailed the banking industry out in 2009 and we are not going to bail them out again.”
But he warned that the businesses that stand to benefit the most from this reform — small businesses for which the swipe fee has become their second-largest business expense — need to be responsible with the savings it provides.
“We cannot put the money in our pockets and run,” he said. “We can’t take a pay raise. We need to reinvest that money in our communities by hiring more people, by lowering our prices. We need to do the right thing.”
Smith, whose business is across the street from a high school, said he might use the savings to sponsor youth sports teams or clubs, or to increase the salaries of his part-time employees.
“For some people it’s survival, for some people it’s hiring more help, but it’s certainly a lot of money back into the economy to help small business and their customers,” Brausen said.
I’m glad to hear business owners encouraging other business owners to invest their savings from reducing swipe fees back into business or communities. We need more business people doing just that.
When are they going to start regulating the cost of a cup of coffee at Caribou? What, not their business? Well, neither is this. It’s silly and it’s probably unconstitutional. The result is going to be all of us paying more fees at banks and it’s not going to save anyone any money. From one pocket to another. When will this liberal gov’t learn that it can’t micro-manage business like this and have success. It NEVER works.
@Mr. Jordan: The bill passed with support from both parties. The split appeared to be more along the lines of big v. small business, from what I’ve read on the subject. All in all, however, I, too, wondered what the government was doing in this until I learned that 3 banks account for something on the order of 75% of the swipe fees collected. That’s as close to a monopoly as you’re going to find today. There should have been another way to deal with it, however. If nothing else, Congress is too ponderous to be setting fees for business transactions.
John – Banks were able to charge these kind of rates due to the monopoly power of the existing processing system. A market without competition is not free. You’re on the exact opposite side of well functioning capitalism.
Hey John, who do you suppose is paying the swipe fee? Take a look in the mirror for your answer.
I do not know the dollars and cents of the cost of swiping credit and debit cards versus taking checks but I would like businesses to consider this in their analysis; My partner is one of the ‘Greatest Generation’. He has one credit card which he pays off monthly. He refuses to have a debit card which at time frustrates me. If a business will not accept his check, he will not do business with them. The number of restaurants which we eat in keeps decreasing because they will not accept personal checks even with I.D. I do not know how many others feel as he does. Even though I agree that swipe-fees are difficult on business, there is more to consider.