Does Credit Card Legislation Go Far Enough?
Small businesses that use cash only mayconsider using credit cards due to new credit card laws.
With the new financial bill signed earlier this summer taking affect, small merchants in cash only business may be considering using credit cards for the first time. But are the new laws enough for businesses to change their way of doing business and accept plastic?
Under the new law, merchants can now legally set $10 minimums on credit-card purchases, and offer discounts and promotions for cash purchases. These new rules can certainly help small businesses that currently don’t accept credit cards, but there are many aspects of the law that have yet to take effect, including the most important to most small businesses, swipe fees.
Over the next eight months, the Federal Reserve will issue new standards for swipe fees for debit cards. These new standards are meant to ensure that fees are proportional to the costs of the transaction. Credit-card fees, however, would remain unregulated, meaning the credit card companies can keep gouging business owners.
Many small business owners pay ridiculous fees on credit cards under the current system. According to the National Association of Convenience Stores the convenience store industry paid $7.4 billion in credit-card fees in 2009 while making $4.8 billion in profits from cards.
Obviously those numbers seem out of whack and there should be a way of changing the system so small businesses can make more of a profit from their sales than credit card companies do. It just seems that the new law, although a step in the right direction, doesn’t go far enough.
How does you business handle credit cards? Will you accept credit cards more regularly with the new laws enacted? What do you think of the government’s attempt to legislate the credit card industry?
