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Kaitlyn Ross is the owner of Coastal Maine Keepsakes in Kennebunk.
In the midst of rising costs for gas, food and housing lies a frustration shared by many consumers and small businesses across Maine, and that’s the cost of using a credit card. Every time you use your card to fill your tank or pay for dinner, about 2.35% of that transaction is charged to the business owner in the form of “swipe fees.” Siphoned into the pockets of giant credit card networks like Visa and Mastercard, these fees can quickly become a massive financial burden that force many merchants to pass them onto customers through higher prices.
Swipe fees regularly rank as the second-highest operating expense for many small businesses, trailing only labor costs. Maine alone loses $371 million every year to swipe fees, and that figure shows no signs of slowing without federal swipe fee reform.
Local shops like mine are already contending with other overhead costs. With the additional weight of swipe fees, I’m forced to make sacrifices to stay afloat in this economy, including cutting back on benefits, reducing staff and raising the prices of my goods.
Fortunately, Congress already has a solution in the form of the Credit Card Competition Act. This bill injects competition into a market essentially devoid of any because of Visa and Mastercard’s largely unrestrained control of the market and credit card swipe fee rates.
Growing small businesses in Maine has always been a vital factor in keeping our local communities thriving. As such, the CCCA represents a chance for U.S. Sens. Susan Collins and Angus King to alleviate a huge financial burden for businesses and consumers and turbo charge our economy.
The CCCA allows merchants to choose from at least two different networks for processing credit card transactions. The bill would not erase swipe fees, but instead foster a system where multiple networks can compete against each other to become the preferred intermediary for vendors. Doing so could result in more reasonable swipe fee rates, driving down costs for business owners and resulting in lower prices for customers. Maine stands to save more than $76 million dollars a year in swipe fees if the CCCA were to pass.
There’s little doubt this year’s midterm elections will be contentious and decided by kitchen table issues that matter most to voters. Of these, inflation and rising prices will likely be top of mind. It’s not hard to predict when Mainers and Americans across the country see billboards of ever-increasing gas prices on a daily basis. In fact, if all fuel purchases were paid with credit cards it’s estimated major banks and credit card companies make over $60 million a day in swipe fees from those transactions.
For Maine’s businesses and families, every dollar matters. Our state deserves a system that keeps more of our hard-earned revenue in our local communities rather than further enriching Wall Street. When it comes to swipe fees and affordability, Sens. Collins and King can show voters their listening to their concerns and taking action by passing the CCCA.