Governor Rejects Attempt to Weaken Electronic Payments System
Denver, CO – Colorado members of the Small Business Payments Alliance (SBPA) applauded Governor Jared Polis’ decision to veto legislation that would have caused chaos for small businesses across Colorado. Small business owners across the state have mobilized against the bill, SB 26-134, based on concerns about its impact on local businesses that depend on credit cards and credit card rewards.
“Governor Polis listened to the concerns of the small business owners who would have been forced to deal with the real-world consequences of this bill every day. Small businesses depend on a reliable, seamless payments system to serve customers, pay suppliers, manage cash flow, and reward employees. SB 26-134 threatened to create new costs, new complexity, and new uncertainty for businesses already navigating a challenging economic environment,” said Lucy Solomon of the SBPA. “Additionally, the bill also threatened to create uncertainty around how visitors’ credit and debit cards would function in Colorado, creating potential headaches for the tourism-dependent businesses who welcome millions of out-of-state travelers every year. We thank the Governor for standing with small business owners instead of special interests and protecting the payment tools, rewards programs, and customer experience that help Colorado businesses compete and grow.”
“Small businesses need support, without a doubt. Unfortunately, this bill would have given big business another leg up at the expense of small businesses. Governor Polis deserves credit for taking a stand on behalf of Colorado small business owners. The last thing small business owners need right now is misguided legislation that tries to fix a system that is already working for small businesses and consumers,” said Melinda Carbajal, Owner of Simply Pizza in Denver.
Credit cards and credit card rewards are vital to the lifeblood of Colorado’s small businesses. As Denver-based SBPA member Liliana Soto wrote in an op-ed earlier this year:
“For my business, credit cards aren’t a luxury. They’re a critical tool that helps us operate and grow. We use credit cards to purchase ingredients, supplies and equipment for our kitchen. Like many small businesses, we rely on the rewards we earn from those purchases to reinvest in our business. In fact, I used rewards points from our business credit card to purchase two commercial refrigerators for our restaurant, equipment that costs thousands of dollars each and helps us safely store ingredients and keep serving our customers.”
These rewards points – which function as working capital for many Coloradan businesses – are threatened by SB 26-134. The legislation bills itself as a technical fix, forbidding credit card processing costs from being added to the tax portion of a sale. In practice, we are concerned that the legislation would create major disruption in Colorado’s payments systems and risk real cutbacks to rewards programs that businesses rely on.
SBPA’s members are also concerned about the impact the legislation could have on their employees. Running separate transactions for tax will lead to slower, more complicated checkouts, longer waits and frustrated customers. Chris Chiari, a SBPA member who owns and operates the historic Patterson Inn in Denver, expressed his concerns about the impact the legislation could have on his employees. “For waiters and bartenders, who rely on high turnover and the goodwill of happy guests, it would be naive to think this change wouldn’t make their jobs harder and ultimately shrink their take-home pay.”
While small businesses are always looking for ways to cut costs, the risks of the proposed legislation outweigh any potential benefits for many Colorado businesses. As SBPA member Daniel Doherty, who owns a restaurant in Brighton, testified at a hearing on the legislation in March, “The biggest beneficiaries of this bill are multibillion dollar corporations like Yum, McDonald’s and Walmart. They’re the ones who push for it, and they’re the ones who pocket the savings.”