As a small business owner who can attest to the hard-hitting nature of swipe fees, I was pleased when Congress took action last year to put reasonable limits on the fees that big banks and credit card companies have used to exploit small businesses and consumers for years.
After all, swipe fees have been holding back small businesses for years and swipe fee rates, which are more reflective of the actual cost of transaction processing, would free up some much-needed capital that would enable me to expand my business, offer more competitive prices or even give back to the community by sponsoring a local Little League team.
But I was disappointed when the Federal Reserve issued final rules that will cap debit card swipe fees at 21 cents after proposing a much lower limit of 12 or even 7 cents. This was after finding that the actual cost per transaction for the banks and credit card companies is just 4 cents, which means under the new rules they are still guaranteed at least a 400 percent profit on each transaction. That is huge!
I am grateful that folks in Washington, D.C., are trying to fix the interchange system that is broken and welcome the lower fees that will take effect in October. But I am disappointed by this less-than-ideal “fix” that clearly favors Wall Street.
George Omogun
Owner
Choice Security
Jamaica
