Small business owners testified last week against Durbin-Marshall mandates
The Small Business Payments Alliance (SBPA) issued the following statement in response to today’s New York Times story on the electronic payments system:
The recent New York Times article about the electronic payments system perpetuates a number of misleading arguments about the Durbin-Marshall credit card bill. According to a University of Miami study, the legislation would cost small businesses over $1 billion in lost rewards while disproportionately benefitting the five largest retailers in America. That’s why an overwhelming majority of small business owners (83 percent) oppose the new government routing mandates called for in the bill.
Small businesses across the country rely on the convenience and security of the existing credit card payments system. They earn greater income when their customers use credit cards, while avoiding the costs and risks associated with cash. When a business first starts accepting card payments, their average transaction size increases by 10 to 15 percent.
Proponents of the legislation base much of their arguments on false information about interchange rates, which have remained essentially flat (at 2.2 percent) for more than a decade. In reality, the cost of handling cash is actually more expensive for small businesses – between 4.7 percent and 15.3 percent, depending on the type of business.
The last thing small businesses need is another mandate from Washington trying to ‘fix’ a system that isn’t broken.
Last week, small business owners from across the country submitted testimony to the Senate Judiciary Committee in opposition of the Durbin-Marshall credit card bill. These small business owners were not given the opportunity to speak with the New York Times for today’s story, but their testimony is available here.