The ongoing debate surrounding credit card mandates continues, with the Merchant Payments Coalition recently directing criticism at credit card companies for challenges faced by Washington, D.C. restaurants. Despite this focus, evidence suggests that other financial pressures weigh more heavily on small businesses and restaurants.
According to a National Federation of Independent Businesses study from last summer, more small business owners reported that credit card payment processing costs are "NOT A PROBLEM" than those who cited it as a significant issue. The NFIB report's initial chart did not rank credit card processing among the top 20 challenges for small business owners. Instead, healthcare costs, taxes, utilities, interest rates, and government paperwork were cited as more pressing concerns.
While credit card processing costs have stayed relatively stable at just over 2% in the past ten years, other expenses for small business and local restaurant owners have surged. Egg prices have risen dramatically, and over 40% of states have implemented minimum wage increases. Additionally, increased real estate taxes and utility costs have contributed to financial strain. According to the Wall Street Journal, labor costs were the largest source of inflation for nearly 60% of small business owners.
The NFIB data indicate that credit card processing is not a primary concern. Nonetheless, the Merchants Payments Coalition's narrative continues. The question arises: who benefits from these mandates?
A University of Miami report suggests that large retailers could gain significantly from the mandates. The study states the mandates would chiefly benefit "retailers with $500 million or more in annual sales" and the "largest U.S. retailers would effectively receive a transfer of approximately $2.9 billion" from the initiative.
There is a belief that investing in technology and establishing national data security standards could strengthen the payment system.