Senate rules in favor of SMBs in credit card swipe fees issue

6/10/2011

Legislation implemented a cap on debit card swipe fees, enforcing a 12-cent cap on all fees charged to small businesses when customers used a bank card. However, financial institutions thought this was unfair and encouraged the government to delay the cap until the issue could be discussed further.

However, Fox Business reports the Senate has rejected that motion, which is scheduled to go into effect on July 21. If the postponement had been approved, small business owners would have had to pay up to 63 cents per transaction until new regulations were decided upon.

"So what happens when, say, Visa decides to jack up debit-card rates - as it has repeatedly in recent years? The banks hardly mind, because they get more money, which encourages them to issue more cards, which is good for Visa," Jerry Rogers, who opposes rampant fee inflation, told the source.

While small business lending is showing some signs of a rebound, funding is still a critical issue for many small business owners. Paying lower transaction fees will help them maximize the funding they have access to.