Vogt: Credit Card Competition Act would hurt NH small businesses
Right now, Congress is debating a change to how credit card transactions are routed that sounds small but will have big impacts on consumers and small business owners. As a former New Hampshire state legislator and community activist, I understand how critical it is for policies at both the state and federal levels to support the small businesses that are the backbone of New Hampshire's economy. I keep hearing about how the Credit Card Competition Act (CCCA) will save small businesses across our state money by allowing credit cards to be routed on cheaper networks. But, transaction fees already sit at around 2.24%, and using the card issuers’ trusted networks means better security on these transactions.
The data is clear that the main beneficiaries of the CCCA would be businesses with $500 million in sales per year. Meanwhile, small businesses are not expected to see significant savings. We know that when a similar rule was passed for debit card transactions in 2010, those same big box retailers that benefited most did not pass those savings onto their customers, with prices staying the same or even increasing.
A University of Miami study estimates that the country’s five largest retailers would save $1.2 billion on credit card interchange fees under the CCCA, but because small businesses lack the same bargaining power with the transaction networks, small businesses either continue paying the same transaction fees or find a cheaper alternative that may have worse data security. Card issuers’ preferred networks are preferred for a reason and that means I can be confident that customer’s information is safe from hackers and credit card fraud.
The Credit Card Competition Act is being propped up as a way to lower prices by lowering transaction fees but is a raw deal for everyone except for the biggest retailers in the country. I hope our New Hampshire delegation to Washington, D.C. continues to support our small businesses and votes No on the CCCA which would give mega-retailers yet another competitive advantage over real small businesses.
Robin W. Vogt is a Durham resident and former New Hampshire House representative for Portsmouth Ward 1 and Newington.
This article originally appeared on Portsmouth Herald: Vogt: Credit Card Competition Act would hurt NH small businesses
