Senate and house leaders came to an agreement last week following discussions on reforms implemented to limit how much a credit card company would charge to retailers for times when a customer uses a debit card for payments. The swipe fee would make things much easier for many small businesses that need a break and it`s important that this solution is implemented as a law soon.
Big banks and credit companies take these fees out of many small business units which make it difficult for many small restaurants to make a profit and the increase in these fees have not made things any easier. Recent years have seen a hike in these fees especially when it comes to debit cards, making things quite difficult.
Each time the customer swipes the card, the merchant has to pay a fee whether it is the cost of a lunch or a big catering amount. Paying the bank and credit card companies for accepting the payments is putting a hole in the merchant`s pocket.
Initially these fees were not over the top and were a part of electronic payments in operating businesses. But in recent years credit card companies have hiked up the fees more than is profitable. Businesses have been paying close to $10,000 as swipe fees and these have risen from 0.8% to 1.3 % since the year 2006.
The main problem with credit cards and debit cards is often a lot of hidden fees emerge only later when it is time to pay the bills. Upon receiving the credit card statement quite a few payments are seen to be made and these transactions would already have been processed making things difficult.
Small retailers are the ones that have to bear the brunt of these fees as they are more affected due to sales being lesser than in case of their larger retail counterparts. Reforms are expected to give them an opportunity to fix things. The Federal Reserve Power, if approved will be able to keep these fees from being a burden to the small retailers in the business.
Small business owners say that with hikes in these fees they have been unable to expand, hire new workers or offer competent services to clients. It is stifling their growth and there is no questions raised as these costs remain hidden from the general public. The business owners are waiting for the congress to decide and act on the reform to make way for more freedom and profits in their operations.