This past week Vermont passed the law on the limit shop owners must pay for every time consumers swipe their credit or debit cards. The law proposed to limit the cost shop owners are expected to pay credit card companies for every purchase a consumer makes at the store. Retailers are expected to pay 1% to 2% of the total cost of the purchase made with a debit or credit card to the credit card company.
The new law will give consumers who pay by cash, specific discounts and the minimum price of $10 for credit card usage. The lawmakers at Vermont passed the bill. The bill was passed unanimously but it did not get Governor, Jim Douglas's approval. The bill needed the Governor's signature to be approved, but the Governor refused to neither veto nor sign the bill which makes it a law even without his signature.
Douglas said he did not want consumers to lose their freedom to use their credit cards but at the same time he knew that shop owner were in a sticky situation because they lose a lot of their profits in payments toward credit card companies. In smaller purchases shop owners make almost no profit. The governor said the new law is likely to drop credit card company settlement in Vermont.
"I do not believe . . . that legislation of this nature is best handled at the state level," Douglas said.
Retailers have been pleased with the new bills passed in recent times as this law is their second victory against credit card companies, the first being the bill sponsored by Senator Richard J Durbin. The Federal Reserve will make sure the fees charged by credit card companies are "reasonable and proportional" to the cost of the transaction and the cost endured by the company. The House passed a bill last December but did not mention the credit card swipe fees. The new bill will watch over MasterCard and Visa as part of the financial overhaul bill.
"What Vermont has done is a first step. What the Senate has done is a more important step, but it's not been completed, yet." Mallory Duncan of the National Retail Federation said.
"I suspect that you're going to see a lot of unhappy Vermont citizens who can't use their cards the way that they want to," Trish Wexler, spokesperson for Electronic Payments Coalition said.