Credit Card Processing Fee’s
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Credit Card Fair Free Act (HR 5546) ) - House Of Represenatives
On July 16, 2008, the U.S. House Judiciary Committee passed the Credit Card Fair Fee Act (HR 5546), by a 19 to 16 vote. Legislation was introduced by D-Rep John Conyers of Michigan back in March of this year. The bill addresses government price controls of interchange rates charged to businesses through their merchant account agreements. This bill clearly states that the board will “set rates and terms” for access to the benefits of accepting electronic payments.
We feel this bill is very dangerous to small merchant’s with business types of higher risk, as they may get squeezed out of the market, by mandated pricing by the goverment. By lowering the margin’s of the credit card processing providers, they will surely cut the amount of risk they are willing to accept. This would surely cost may small businesses, especially internet-based-merchants the ability to accept credit cards at their business, as no provider would accept the risk with lower rewards.
The credit card processing indusrty over the past ten years has regulated itself, as it should in a Free Market Economy. Ten years ago, a merchant’s monthly overhead to accept credit cards was much higher than it is today. Then, a merchant had a choice of paying $1,200 for a credit card terminal or leasing one for $3,400 over a 4 Year Contract. Those day’s are gone, as merchants can receive a free terminal with their merchant account. Today, many things are negociable, even to the smallest of merchants, as the competion is fierce with the introduction of the internet.
As for the idea of government price controls in a free market economy, well today’s congress just does not get it. Back in September of 2007, legislation was passed to control the interest-rates on student loans. This caused all of the major banks to stop student loan lending in the Spring of 2008, then guess who came to the rescue 2 month’s ago, the legislature !!! They passed a new bill, guaranteeing the student debt, with tax payer dollars. ( I don’t think they will be guranteeing any merchant accounts when mom & pop can’t get a one, do you ?? ).
Again, we think this is bad politics and bad for business. Please share your thoughts.
MARK SANDS
http://www.usa-merchantaccount.com
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September 8th, 2008 at 7:30 am
Credit Repair…
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