Georgia members of Congress should back law lowering credit card swipe fees
Georgia has one of the most prosperous economies in the country, ranking near the top of our nation’s biggest GDPs.
But without small businesses like mine that are the heart and soul of the Peach State, our prosperity would be only a fraction of what it is today.
That’s why our congressional representatives in Washington need to support measures like the Credit Card Competition Act, which will lower the crushing credit card swipe fees currently siphoning money out of our state and its communities.
Georgia is home to an estimated 1.4 million small businesses that provide an income to more than 42% of the state’s employees. But for many businesses, the second-largest operating expense after payroll is swipe fees, which are charged to merchants as a percentage for every credit card transaction.
These fees, rising year over year, have reached exorbitant levels. And as major credit card companies continue increasing fees to go along with growing credit card use, the financial burden on our local businesses has grown too large to ignore.
Business owners pass on costs to consumers
Georgia businesses paid about $3.3 billion in swipe fees last year alone, but customers aren’t exempt from the cost either.
Higher swipe fees for business owners means they have to raise prices to account for the additional overhead, meaning consumers are on the hook for swipe fees just as much as their favorite stores.
Swipe fees cost the average family an additional $1,800 in 2024, and that number will rise unless the current arrangement changes.
The only winners in the current status quo are major credit card companies like Visa and Mastercard, which control more than 80% of the payments market.
That control means the two companies schedule swipe fee rate increases that major banks agree to charge in order to avoid competing with each other.
It’s a cartel-style price fixing scheme that has allowed the duopoly to rake in billions of dollars while merchants and consumers are left with no means of pushing back or negotiating an affordable rate.
Fortunately, the CCCA would help remedy the issue by letting merchants choose between at least two credit card networks when processing transactions, creating market pressure for the industry’s giants to lower their swipe fees in order to remain competitive.
Networks currently operating in the debit space could finally break into the market and provide similar services at a better rate. Simply injecting some competition into the market would allow merchants a choice, encouraging all networks to reduce their fees and improve their services to become the chosen processing network.
Voters and small-business owners support competition
Passing the CCCA should be a common sense decision for lawmakers looking to lower costs for Americans. The bill would save businesses in Georgia around $502 million annually.
Those savings would help businesses lower prices and improve wages, making it no surprise the overwhelming majority of voters support passing the bill, along with nearly 80% of small businesses that support federal swipe fee reform.
The CCCA also carries bipartisan support on Capitol Hill, an achievement on its own given the state of polarization in Washington these days.
The CCCA would be a game changer for my business and for the consumers who patronize my store. It’s high time the payments industry saw serious competition again, and the CCCA is the best way to bring that about and lower swipe fees.
I hope Georgia U.S. Sens. Raphael Warnock and Jon Ossoff throw their support behind this bill.
It’s a win for Georgians and a win for the spirit of competition that makes our state one of the best places in America to do business.
Ginger Howard is owner of Ginger Howard Selections in Atlanta.
