Small Businesses Oppose Durbin-Marshall Style Credit Card Mandates

SBPA Kicks off National Small Business Week with New Report on Value of Electronic Credit Card Networks for Small Business

  • 83% Oppose New Mandates
  • Two-Thirds Believe Durbin-Marshall Will Benefit Largest Retailers More Than Small Business
  • 71% Say Accepting Credit Cards Helps Profitability and Growth
  • Two-Thirds Report Current Processing Fee Necessary for Privacy Protections
  • Labor, Inventory, Inflation, Taxes Rank as Highest Expenses
  • Nearly Two-Thirds Say Payment Processing Does Not Negatively Impact Bottom Line

Washington, DC – The Small Business Payments Alliance (SBPA) issued a report today featuring new polling data on the importance of credit cards and electronic payments for small business. The report found that an overwhelming majority of small businesses oppose new government mandates on payment networks; are more concerned with inflationary pressures than the cost of processing credit cards; and rely on the security offered by leading credit card networks to operate their businesses and serve their customers.

Legislation currently under consideration in Congress – the Durbin-Marshall credit card bill – was introduced last year as the “Credit Card Competition Act” (CCCA). Despite its name, this legislation would circumvent the competitive market with a new government “routing mandate” that would dictate processing networks, without regard to security or quality. A recent study revealed that the bill would “disproportionately benefit the top five businesses in the U.S.” while “costing small businesses over $1 billion in lost rewards as well as a decline in access to credit.”

The SBPA was formed to help give voice to small business owners who know the value of the electronic payments system for their business. As part of that commitment, SBPA conducted a survey of small business owners and decision makers to find out how they feel about legislation that would impact this system.

“The message from small business owners is loud and clear: no new government mandates that would weaken the modern and secure electronic payments system,” said SBPA Spokesperson Peter Kauffmann. “The survey shows that small business owners see the Durbin-Marshall credit card bill for what it is – needless government regulation that would benefit corporate mega stores at the expense of small business.”

The report underscores several key findings:

Small business owners oppose new government mandates. Most small business decision makers do not support government regulation that imposes new payment networks, and they have reservations about the Credit Card Competition Act or other forced adoption of processing networks.

  • When asked how much government regulation there should be on payment processing fees, most (83%) small business decision makers say government regulation should stay the same (48%) or decrease (35%).
  • Two-thirds (64%) believe that the Credit Card Competition Act would benefit large retailers more than small businesses, with 60% of small business decision makers saying that Congress is pushing through changes to digital transactions without considering the impact on their businesses.
  • Similarly, around two-thirds (64%) say that forced adoption of new/updated processing networks will place an unfair cost burden on business owners, with more than half (57%) expecting to see lower profits if new network processing changes are required.

The existing electronic payments system is critical for small business sales, growth, and cost-saving. Digital transactions are widely accepted by small business and are attributed to helping them grow and manage the business in a more effective way.

  • When thinking about digital transactions, 88% of small business decision makers say they are somewhat or very important to their business.
  • 88% mention that customers utilize credit cards or digital payments for at least some (23%) or most (65%) purchases.
  • Around three-quarters (71%) say that accepting credit cards and digital payments has helped their business’s profitability grow.
  • Two-thirds (67%) say that accepting digital payments has made bookkeeping easier.

Small businesses believe the benefits of the existing electronic payments system are worth paying for. Small business decision makers trust, rely on, and value the secure transactions, fraud protections, and data privacy of their current payments system.

  • Nearly all (99%) small business decision makers believe that their customers place importance on keeping their payments secure, and two-thirds (66%) say that their current payment processing fees are necessary for digital privacy.
  • 81% believe they can trust their current payments system to protect their customer’s data.

Small businesses are much more concerned with inflation than processing fees. Payment processing fees are not a top business cost for small business decision makers and have a smaller impact on the businesses bottom line than inflation.

  • Payment processing fees are not a top cost for small business decision makers. Cost of labor (46%), cost of goods sold (34%), inflationary costs (29%), and taxes (29%) are the largest expenses, and only 14% indicated payment processing fees as a top business expense.
  • More than half (61%) of small business decision makers say that payment processing fees do not have a high impact on their business’s bottom line. Two-thirds (64%) believe that inflation has hurt their bottom line more than payment processing fees.

This poll was conducted by Morning Consult between March 29 –  March 30, 2024, among a sample of 250 Small Business Decision Makers. The interviews were conducted online and the data were unweighted. Small Business Decision Makers were defined as: working either full-time, part-time, or self-employed (at their own business) at a small business (<500 employees); influencer or primary decision maker at the business; or title: Director+ (Director, VP, or Owner). Results from the full survey have a margin of error of +/- 6 percentage point.