During National Small Business Week, small business owners across the country will be recognized for the important role they play in our economy. The nation’s 33.3 million small businesses employ 61.6 million Americans – almost 46 percent of the private sector workforce. The modern and secure electronic payments system is critical to the success of small business – but there is a push in Congress for new government mandates that pose a direct threat to the electronic payments system.

The Durbin-Marshall credit card bill was introduced last year in Congress 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 Small Business Payments Alliance 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.

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 their 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.

Existing Electronic Payments System is Critical for Small Business 

Digital transactions are widely accepted by small businesses and are attributed to helping them grow and manage their businesses 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 Value Existing Electronic Payments System

Small business decision makers trust, rely on, and value the secure transactions, fraud protections, and data privacy of their current payments system. Payment security is important to small business decision makers and current payments processing networks help support payment security.

• 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 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 a business’s 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.

Conclusion

The survey shows that small business owners see the Durbin-Marshall bill for what it is – needless government regulation that would benefit corporate mega stores at the expense of small businesses. Small business owners oppose new government mandates by an overwhelming margin; they rely on the security and ease of the existing electronic payments system; and they are much more concerned with issues such as inflation than they are with interchange fees. The message from small business owners is loud and clear: no new government mandates that would weaken the modern and secure electronic payments system.

How This Survey Was Conducted

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
• Title: Director+ (Director, VP, or Owner)

Results from the full survey have a margin of error of +/- 6 percentage point.