A report from the Small Business Payments Alliance (SBPA) finds that the majority of small businesses oppose new government payment network mandates. They believe the Durbin-Marshall bill, aka the Credit Card Competition Act, will disproportionately benefit the top five businesses in the United States by creating a new routing network that would dictate processing networks with no concern for security or quality.
The SBPA quoted a study which suggested such a move would cost small businesses more than $1 billion in lost rewards while lowering access to credit.
“The message from small business owners is loud and clear: no new government mandates that would weaken the modern and secure electronic payments system,” said SBPA spokesperson Peter Kauffmann. “The survey shows that small business owners see the Durbin-Marshall credit card bill for what it is – needless government regulation that would benefit corporate mega stores at the expense of small business.”
The SBPA survey found that 83% of small business owners believe government regulation of payment processing should either stay the same (48%) or decrease (35%). More than 60% feel the Credit Card Competition Act would benefit large retailers more than small businesses, with 60% saying that Congress is pushing through changes to digital transactions without considering the impact on their businesses. Close to two-thirds (64%) say that the forced adoption of new or 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.
Small businesses fear the changes in part because credit card payments are crucial to their success, with 88% of small business decision-makers saying they are somewhat or very important to their business. Nearly two-thirds, 65% say digital payments and credit cards are used for most of their purchases. More than 70% say that accepting credit cards and digital payments has helped their business’s profitability grow, with two-thirds adding that accepting digital payments has made bookkeeping easier.
While cognizant of fees, small business owners are more concerned with inflation. Labor costs (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 60% 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.
“The SBPA is a coalition of independent businesses, entrepreneurs, and tradespeople who know the value of the electronic payments system for businesses and consumers,” the organization said in a statement. “Our members rely on credit cards and rewards to lower operating costs, re-invest in their businesses and employees, manage cash flow, and give customers more choice, security, and convenience in how they pay.
“The modern, safe, and secure payments ecosystem is critical to our members’ success and contributions to local communities across the country. SBPA aims to educate, empower, and activate members to help ensure the electronic payments ecosystem continues to deliver access to credit, credit card rewards, convenience, and security and fraud protection for American small businesses and consumers.”
