NSBA Responds to Swipe Fee Compromise
June 22, 2010


Molly Brogan




NSBA Responds to Swipe Fee Compromise


Washington, D.C. — Senate and House conferees have unveiled a compromise over how to address swipe fees, the charges assessed by large banks and credit card companies on merchants who accept debit and credit card payments from their customers. Swipe fees have long been a problem for many small businesses, and though the compromise doesn’t go as far as NSBA would prefer, it does offer some relief for small businesses.


“The conference committee’s swipe-fee compromise is not ideal,” stated NSBA President Todd McCracken, “But at the end of the day, we’d rather take some steps forward than watch the anti-competitive interests of large banks win out over small business yet again.”


Swipe fees have been a sweet spot for major financial institutions, even in the downturned economy, as just 10 credit and debit card issuers raked in more than 80 percent of the $48 billion earned by the industry in swipe fees for 2008 alone. These massive profits prompted a windfall of lobbying from large banks urging the House to oppose the language initially offered by Sen. Dick Durbin (D-Ill.) to reform the swipe fee system.


NSBA is pleased that the compromise still includes language directing the Federal Reserve (the Fed) to ensure that swipe fees charged for debit card transactions are “reasonable and proportional” to the actual costs incurred to process the transaction. Another NSBA-supported provision that made the final cut will allow merchants to offer discounts for a particular form of payment, i.e. cash or check. Additionally, the compromise language still allows merchants to set a minimum transaction amount—$10—for payment by credit card.


Unfortunately, the compromise would not allow merchants to offer discounts to customers using lower-fee credit and credit cards.


Although the compromise language is not perfect, NSBA urges the conference committee and the full Congress to accept this carefully-crafted compromise without further change. For more information on the details of the compromise, please click here.


Since 1937, NSBA has advocated on behalf of America’s entrepreneurs. A staunchly nonpartisan organization, NSBA reaches more than 150,000 small businesses nationwide and is proud to be the nation’s first small-business advocacy organization. For more information, please visit www.nsba.biz.