Senate Democrats

Democrats Fight to Protect Small Businesses From Credit Card Swipe Fees

Americans paid approximately $48 billion in credit card swipe fees in 2008 — triple the amount that credit card companies collected in 2001.  These fees have landed in the laps of consumers and small businesses — and Democrats have taken notice.
"Credit and debit cards are quickly replacing cash and checks in today’s economy — they accont for more than half of all retail sales in America and are used to buy nearly $30 billion a year in goods and services from the federal government," said Sen. Dick Durbin. " Visa and MasterCard, which control 80% of the credit and debit card markets, have established a system where they and their big bank allies take an automatic cut out of every credit and debit transaction." These "cuts" that Durbin refers to are the swipe fees or "interchange", which are collected from retailers by the credit card companies and their member banks every time a credit or debit card is used to pay for a purchase. This fee varies with type of card, size of merchant and other factors.
In an effort to reform the interchange system, Durbin successfully added a bipartisan amendment to the Senate’s Wall Street reform legislation this year that will require the Federal Reserve to determine if the current interchange fees structure is both "reasonable and proportional" to the real cost of processing a debit card transaction. Durbin’s amendment also prevents card networks such as Visa from penalizing sellers for offering discounts to customers. 
"I have owned my small business for almost four decades. Year after year, I have seen the effect of these fees firsthand. Last year Visa and MasterCard made more off of my store than I did. And I never once saw anyone from Visa or MasterCard mopping the floor, washing the windows, or taking inventory. No — they just want to take money from my cash register," explained Dennis Lane, a 7-Eleven franchise owner and national spokesman for Reform Swipe Fees NOW!, to Huffington Post. "The facts are on our side against the massive lobbying campaigns by Visa and MasterCard. All Congress needs to do now is include the provision as part of financial reform, and small businesses and consumers will see relief."
As Senate and House Democrats work together to finalize the Wall Street reform conference report, they aim to maintain this provision in the legislation’s final version, which will come before the Senate for a final vote in the coming weeks.

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