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Retailers in Danger of Backsliding on Swipe Fees

Bobby & Steve’s Auto World President Steve Williams highlights the need for Congress to uphold debit reforms contained in the Durbin Amendment.
January 9, 2017

​MINNEAPOLIS, Minn. – “We're in danger of backsliding on swipe fees,” begins an op-ed in the Star Tribune, penned by Bobby and Steve’s Auto World President Steve Williams. “If debit reform is repealed, there goes the free market. Why risk Minnesota jobs to favor big banks in San Francisco and New York?”

Williams notes that competition should govern the free market, which makes companies more efficient and keeps prices fair. The free market, after all, made us the largest economy in the world, he says. “Unfortunately, that’s not what we retailers face in our businesses. Here’s why: Every time you swipe a debit or credit card to pay for something, the bank that issued your card takes a huge bite for processing the transaction,” he writes.

Reforming Dodd-Frank has been cited as a law President-elect Donald Trump will address when his administration takes over. And with 60 new members now in office to kick-start the 115th Congress, NACS members and industry allies are communicating the need to maintain current debit reforms.

NACS members can also help ensure debit reforms are protected by writing to their U.S. representatives and asking them to oppose legislation that will obliterate current debit reforms.

“Competition not only means lower prices for consumers: It also gives small businesses a fair shake (swipe fees are now retailers’ second-largest operating cost after labor, a crushing burden),” writes Williams.

“In my business, gas stations and convenience stores, I employ 400 people at eight locations. As with almost every other convenience store, the banks take more in swipe fees than I earn in profits. My company is sound—in fact, we’re opening a ninth location—but not all small businesses in Minnesota stand on such firm ground.

“That’s why it’s so important to understand that even modest debit reform supported 300 jobs in the state in its first year alone, 2012, according to a noted economist, and saved Minnesota consumers more than $108 million,” Williams continued.

He continues, questioning if we really want to load down small retailers with these large swipe fees at a time when every job assumes even more importance.

“That’s why people should tell their legislators in Washington we need a fair and free market for debit cards. We can’t afford to lose what progress we have made. The cost in jobs, hardships to families and small businesses, and the dent in our economy would be just too great.

“And once we’ve kept the debit market free, we need Congress to take a hard look at the market for credit cards.”