Support Durbin’s Efforts To Lower Swipe Fees
By Joe Rossi, NCASEF Executive Vice Chair
The 30 plus years that I’ve spent at the corner of North Dearborn and Maple in Chicago as a 7-Eleven franchisee have been some of the greatest of my life. Since I first opened the doors of my store, I’ve been able to support my community through thick and thin. But now, I’m finding it more difficult to keep my lights on and serve Chicagoans due to increased credit card swipe fees.
This issue has been a long time coming. On every purchase, credit card companies will impose a processing fee, or what most Americans know as a “swipe fee.” Unfortunately, the credit card processing market is unfairly stacked against small businesses, as just two companies—Visa and Mastercard—are able to monopolize the rules.
Back when I first opened up shop at the corner of North Dearborn and Maple in 1988—which is now referred to as “Honorary Joseph Rossi Way”—20 percent of my customers paid by credit card, while 80 percent used cash. Those numbers have since swapped, as change shortages and the COVID-19 pandemic further increased shoppers’ reliance on credit cards. For Visa and Mastercard, this shift in consumer habits has been a godsend. For me, not so much.
I’ve had little choice but to increase the price tag on many of my products to offset these rising swipe fees, and slow down hiring for open positions. While I always want to avoid raising prices and creating pain points for my customers, the credit card business has thrown me between a rock and a hard place.
These companies are double dipping. Not only are they automatically able to make more money off swipe fees due to inflation, but they also do so by directly increasing the fees themselves. You couldn’t ask for a clearer example of highway robbery.
It’s not just my business that is suffering. The convenience store industry at large lost out on $13 billion to swipe fees in 2021, while the average 7-Eleven store pays an average of $85,000 each year in these fees alone. Many businesses have found themselves at the complete mercy of credit card businesses, opting to go “credit card only,” which increases the financial pain.
It’s frightening to consider that I may not be able to support the community the same way I once have due to swipe fees. In prior years, I’ve donated to both my local school district and Lurie Children’s Hospital, but that may be more difficult this year and next due to these added costs.
Congress is attempting to clamp down on unregulated swipe fees and restore competition within the credit card industry. A group of lawmakers in the U.S. House and Senate, on both sides of the aisle, introduced the Credit Card Competition Act, which would require the largest U.S. banks to offer other networks for processing credit transactions.
Senator Dick Durbin is one of the lead sponsors of the legislation and should be applauded for his efforts to help small businesses at such a difficult economic time. The entire Illinois congressional delegation—particularly those representing the Chicago area—should follow Senator Durbin’s lead and support this measure.
In all of my years of business, I’ve been able to withstand the worst of circumstances—from shoplifting incidents to the COVID-19 pandemic. But runaway swipe fees are a new serious challenge and one that may be near impossible to overcome. Washington must restore competition in the credit card industry or else Visa and Mastercard may drive my business—and others across the country—straight into the ground.