SBPA Hosts Discussion at CardCon to Highlight Implications for Small Businesses and Consumers
San Antonio, TX – Attendees at CardCon, the annual conference for credit cards and consumer media, gathered for a panel discussion today hosted by the Small Business Payments Alliance (SBPA). The panel was moderated by CardCon producer Jason Steele, who was joined by industry experts discussing the status of the Durbin-Marshall credit card bill in Washington and the implications of the legislation on small businesses, the travel industry, credit card rewards programs, and card security.
“The Durbin-Marshall credit card bill poses serious risks to small businesses, especially because the corporate mega stores with enormous volumes of transactions would be the biggest beneficiaries of the proposal. This drastic shift in the digital payments ecosystem would decimate rewards programs, while increasing the risk of fraud for small businesses and consumers. Small business owners and consumers oppose government mandates that would threaten the security and rewards programs they rely on,” said panelist Lilliam Lopez, President/CEO of the South Florida Hispanic Chamber of Commerce.
“We all saw what happened when the original Durbin Amendment was passed in 2010 – rewards programs for debit cards were eliminated and savings were never passed on to consumers. Anyone who cares about robust air travel – made possible by credit card rewards – or significant consumer protections for their purchases should oppose Durbin-Marshall,” said panelist Gary Leff, View from the Wing.
“The industry currently invests billions of dollars every year to maintain safe and reliable payment networks, but Durbin-Marshall would pick winners and losers by forcing banks to open up some credit cards to alternative processors that would put consumer financial data at risk. These mandates would result in weaker fraud protections and security features, and less access to credit and loans for many small businesses,” said panelist Dalia Martinez, Executive Vice President, Operations at IBC Bank.
The Durbin-Marshall credit card bill was introduced last year in Congress as the “Credit Card Competition Act” (CCCA), and the bill’s sponsors are pushing for a vote this fall. The proposed legislation is a direct threat to the electronic payments and rewards system and would have a major negative impact on small business owners who use credit cards and rewards to run their businesses. Despite its name, the 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 Small Business Payments Alliance was formed in the wake of proposed changes to the electronic payments system, to help give small business owners a greater voice in Washington.
- Small business owners rely on credit card payments and rewards programs to lower operating costs, re-invest in their businesses and employees, manage cash flow, and give customers more choice, security, and convenience in how they pay.
- The overwhelming majority of small business owners oppose Durbin-Marshall-type government mandates:
- Most (83%) say government regulation should stay the same or decrease.
- Two-thirds (64%) believe Durbin-Marshall would benefit large retailers more than small businesses.
- 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.