This year, the Illinois permits law is scheduled to enter the credit and treatments companies from imposing an exchange fee on taxes and advice. This measure is the first in the country that aims to “criticism fees” outside of control, providing concrete relief to small companies and consumers. It is not surprising, that the law is already attacked by credit card companies that want to maintain the current situation. This is where our elected leaders in Washington can give a hand.
Credit cards exchange fees-which are often referred to as “rush fees”-are the second highest operating expenses for small companies behind employment costs. Decades are imposed on merchants every time the customer lists or carries out a credit card. Since the fees – which generally reach 2 % to 4 % of the purchase amount – are very high, small companies have no other option but pass a lot of costs for consumers. In fact, the intermediate American family ends with an additional $ 1,200 payment every year because of the “transition fees”.
It is a double inflation that gives cold water on our economy and the power of consumer purchase. The problem stems from the lack of competition. Visa and MasterCard Control 80 % of the credit card market. This gives Corporate SuPoly Free REP to raise “criticism fees” with the minimum reaction due to the presence of little alternatives.
Before Illinois took over last year's procedures to start cutting in the credit card plan, the state's business owners were paying a total of $ 4 billion annually in “criticism fees”. On the national level, companies thorns more than $ 148 billion in credit card fees annually.
This strict example of manipulation of the market should be an invitation to wake up for Congress. Some – like the American Senator Dick Durbin in Illinois – represented reforms to give small companies more options on how to process credit cards. Legislation, which is called the credit card competition law, is far from the issue of a red state or a blue state. Even the Vice President JD Vance support the proposal while he was in the US Senate.
Policy benefits from the strength of competition in the free market. This will require large banks of more than $ 100 billion of assets to include a second processing network on the cards they export to consumers outside the visa or MasterCard. Change will encourage credit card networks to compete for retailers of all types and sizes – which presses “criticism fees”. After all, as with almost every other industry, more choice and competition bring lower prices and better service.
This legislation is irrational, and it is expected that it will provide companies that exceed $ 16 billion-with the provision of merchants in Illinois approximately 650 million dollars. These are real money that allows the continuation of investment and growth, which is why more than three quarters of small business owners throughout the country support legislation. But until legislators give the main priority on the main street on banks and credit card companies and get this procedure via the finish line, small companies will remain at the mercy of the financial giants.
Passing the credit card competition law is not only related to lowering fees. It comes to protecting small companies, enhancing competition in the payments sector and enabling merchants to provide economic opportunities in their societies. Thanks to the Ruler's leadership, JB Pritzker, Senate Speaker Don Harmon and Speaker of Parliament Emmanuel “Chris” and Walsh took decisive measures to address this problem. It is now time for our elected leaders in Washington to follow their progress and do the same thing for the entire nation.
Rob Car is the president and executive director of the Illinois retail Association.
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