Running a bookstore in Savannah means every story has multiple chapters. One in particular has to do with the credit card processing fees draining the life from small businesses like mine.
As Georgia lawmakers at both the state and federal levels explore ways to support Main Street entrepreneurs, promoting more competition in the payments sector would give countless small businesses in the state a happy ending.
You see, each time a customer swipes, taps or inserts their credit card to purchase the latest bestseller, my store gets charged what’s called a “swipe fee.” This fee — which typically ranges from 2% to 4% of the entire purchase amount — is grabbed by the credit card company and bank.
The real kicker is that small business owners have zero leverage in this arrangement. There’s absolutely nothing we, as independent operators, can do about it.
‘Duopoly’ effectively disadvantages small businesses
Credit: Hand
Credit: Hand
Visa and Mastercard have formed what is effectively a duopoly in the payments arena, controlling 80% of the credit cards in circulation. This allows them to write the rules, set the rates and dictate terms while small businesses are left reading from their script.
The numbers show just how tight this stranglehold is. Main Street businesses across the U.S. paid over $148 billion in credit card processing fees last year alone. And that’s a $12 billion increase compared with 2023.
This isn’t the free-market playbook America was built on. It’s a rigged system where two corporations extract billions from Main Street while small businesses struggle to keep their doors open and shelves stocked.
Fortunately, there’s hope for a better ending. The Credit Card Competition Act represents exactly the kind of market-based reform that could restore competition to the payments sector. Supported by a bipartisan group of lawmakers, the legislation would require banks with over $100 billion in assets to include a second processing network on their credit cards.
This would give smaller credit card networks a foot in the door and allow Main Street operators to choose who they’d like to process their transactions. In turn, Visa and Mastercard would be compelled to lower their “swipe fee” rates to stay competitive.
Small businesses are the lifeblood of Peach State’s economy
The potential savings from this bill are a game-changer. Businesses would save up to $16 billion annually, while American families would see their household costs drop by nearly $1,200 each year.
For a small business like mine, those savings could translate into expanding our operations or simply giving back to our local community.
Small businesses are the heartbeat of Georgia’s economy, representing 99.7% of all businesses in the state and employing nearly half of our workforce. We’ve built our communities through innovation, hard work and fair competition — the same principles that should apply to the companies processing our customers’ payments.
Every day we wait is another day that Georgia’s small business community loses hard-earned revenue to the modern-day credit card cartel. It’s time our state’s elected leaders give this story the ending it deserves and defend both small businesses and consumers by promoting free market payments reform.
Melissa Taylor is the co-owner of E. Shaver Booksellers in Savannah, Georgia.
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