Small businesses across the US are calling for changes to the debit card interchange fee. This fee, imposed by payment card companies, increases costs for small vendors and threatens their survival.
What are debit card interchange fees?
Debit card companies charge merchants a percentage of each purchase made with a debit card. This fee is known as the interchange fee, and it is typically around 2-3%. This fee is in addition to other costs related to the sale, such as the cost of goods and services and sales tax.
Why are small businesses against it?
Small businesses are against the interchange fee because it adds to their operating costs. It is estimated that small businesses are paying billions of dollars in fees each year, and the cost is rising as more shoppers turn to debit cards for payments. This increased cost can reduce profits and threaten the survival of small businesses.
What can be done?
Small business groups are calling for reforms that would reduce the cost of the interchange fee. Here are some of the proposed solutions:
- Caps on interchange fees – The amount charged should be limited to no more than 0.5%.
- Subsidies – Subsidies to offset the cost of interchange fees for small businesses.
- Alternatives – Small businesses should explore other payment methods such as cryptocurrencies and e-invoicing.
- Lobbying for change – Small businesses should lobby the government to introduce reforms that would reduce the cost of the interchange fee.
Small businesses across the US are rallying against the debit card interchange fee and the increased cost it is imposing. The cost is becoming increasingly unsustainable, so reforms are urgently needed to protect small businesses.