Small business owners across the nation remain shocked – and disappointed – by the Fed’s final ruling issued Wednesday which will set a 21 cent –cap on debit card swipe fees, as four retailers from across the nation discussed on a blogger call today, Thursday, June 30. Following years of battling Wall Street to bring some reason to the interchange system that price gouged customers for years, Congress finally passed legislation to ensure that these fees are ‘reasonable and proportional’ to the actual cost of each transaction, only to have it significantly weakened by the Fed’s ruling.
“I’m extremely disappointed by the Federal Reserve’s final ruling on swipe fees,” said Dennis Lane, 7-Eleven franchisee and national spokesperson for Reform Swipe Fees NOW!. “The Fed’s final regulations on swipe fees are even more generous than its proposed rules – guaranteeing that the biggest banks and credit card companies are going to have a more than 400 percent profit per transaction – coming from a retailer who makes 1-2 percent profit on each transaction, I can assure you that this is outrageous.”
Although the 21 cent cap it is an improvement from the previous fees, which averaged around 44 cents, it is a far cry from the 12 cent proposed cap. However, Congress voted in favor of commonsense reform that is “reasonable and proportional” to the actual cost of each transaction on two separate occasions, and many small business owners don’t think that 21 cents is what Congress had in mind.
The Fed’s final ruling is a significant departure from the original proposed 12 cent cap, sending a clear message to Main Street. It conveyed to the American public that the Fed is clearly an organization that panders to big banks, and more importantly, that nothing is ever over in Washington. Small business owners will continue to make their voices heard as they move forward.
“We’re clinging on by our fingernails in small business” said Jennifer Cavallaro, owner of the Beehive Café in Bristol, Rhode Island. “ And the banks post record profit. So the argument that they need these fees just doesn’t, as Boehner said, pass the straight face test.”
Participants on the blogger call included: Dennis Lane, 7-Eleven franchisee in Quincy, Massachusetts and National Spokesman for Reform Swipe Fees NOW!; Jennifer Cavallaro, owner of the Beehive Café in Bristol, Rhode Island; Nick Diambre, owner of Oasis in Portland, Maine; Todd Johnson, owner of Johnson Insurance Management, Inc. and Union Cigar Company, in Monroe, North Carolina.