Wisconsin - as reported by the Wisconsin Restaurant Association or the WRA, credit cards and debit cards processing cost have been eating small time business sectors as well as restaurants profits. They have stated that the credit and debit card processing fee has increased over 300 percent in relation to the past years. They have also said that small businesses cost 2 to 3 percent of each purchase or service transaction to pay for the swipe fees of each credit and debit card.
Only last year, small time businesses have paid over $20 billion just for debit card transaction fees and apparently they have spent almost the same amount with credit card transaction fees. These figures were reported by the National Retail Federation or the NFR.With the help of the newly passed bill in the Congress, small businesses expect that credit card companies as well as debit card companies and lenders would retract their current transaction fees and interest rate strategies and would formulate an easier and better one to accommodate the new laws. Also, due to the country's recent state, American consumers have finally come back to paying for services and purchases with cash and check.
The newly passed bill in the House of Representatives aims to help and loosen the load of credit and debit card debts from, not only the consumers but also from the small businesses' backs. Aside from limiting the transaction fees and the overdue fees of each individual fee the bill has also controlled the rate of swipe transaction fees for merchants and business owners. The bill limited the liberty of the credit cards and debit cards companies and other lenders to increase the rate of processing cost of every transaction involving credit card swipe.
Along with the bill is a Senate encouraged amendment backed by the Senate Majority Whip Richard Durbin. The amendment stated that the Federal Reserve or the Fed must control swipe fees by setting up rules that would maintain a reasonable as well as a proportional processing fee for every debit card swipe. Also included in the amendment is the freedom of each business establishment, both small and large, to give out discounts for individuals who pay for their purchases or services taken with cash, check or debit card and not with their credit card.
Aside from these various benefits that both the consumer and the merchant would have, it would also restrict consumers from purchasing items and paying for them with their credit cards. This is by having the bill restrict the minimum value of purchases to $10 before a consumer could pay for it with his or her credit card. This form of restriction was, however, prohibited by the two credit card giants, Visa and MasterCard, before the bill was passed by the Congress. However, even though the bill would restrict the liberty of lenders to increase the rate of their credit card swipe transaction fees, it still is a question since they did not really regulate at what price the fee is since the bill only regulated the transaction fee of the debit card swipe.