Sen. Dick Durbin is making one more push to rein in credit card swipe fees, which are taken from each transaction. Small business owners joined the Democrat during a stop at Cafe Moxo in Springfield Tuesday to show how the fees impact them.
All said the fees, which can cost 3 percent or more, are eating into their ability to pay employees, market their business and expand.
"It puts a small business owner like myself in a really tough position," said Cindy Frisina, owner of Small Town Trading Company in Taylorville. "Do you pass off those costs onto the consumer? Or do you absorb them yourself and have it cut into already thin margins?"
Frisina said most customers want to pay with a credit card.
Durbin, who has announced he will retire when his term ends early next year, has perennially sponsored legislation to add more competition. The plan would require large banks to offer another network, giving businesses options that Durbin said could bring down fees.
Durbin said Visa and Mastercard control about 85 percent of the credit card market. They don't negotiate and businesses have no recourse. The senator said the average American family pays nearly $1,200 per year in swipe fees, while banks profit $111.2 billion annually from credit card swipe fees charged by Visa and Mastercard.
“As Illinoisans struggle to get by, big banks are seeing record profit margins that are more than six times the profit margins of retailers,” said Durbin. “By bringing real competition to credit card networks, we can reduce swipe fees and hold down costs for small business owners and their customers. It’s time to pass my Credit Card Competition Act.”
Mark Forinash, owner of Cafe Moxo, said the fees are limiting how generous a business can be and that changes would help beyond the balance sheet.
"Not only help support our current employees, maybe allowing them to make a little more money. maybe the prices go down on the food a little bit. But I can guarantee you what we would do is be a little more prevalent in the community," he said.
“Credit card processors charge more than $187 billion credit and debit card swipe fees each year. With no guardrails in place, these fees jumped 11.6 percent in just one year – siphoning money away from retailers that hire and invest in our communities. This proposal would increase competition and transparency, helping to drive down costs while supporting local businesses and protecting consumers,” said Rob Karr, president and CEO of the Illinois Retail Merchants Association.
Durbin said banking interests have prevented changes from passing on Capitol Hill. But he said President Trump's recent announcement supporting the measure could change the outlook.
