James Rivenbark, owner of Jars Hospitality, expressed concerns in a testimony to the Senate Judiciary Committee regarding the proposed Credit Card Competition Act. He said that the legislation could compromise payment security and increase fraud risks for businesses.
"Unfortunately, the proposed Credit Card Competition Act would make the credit card payment system less secure because it would require banks to expose cards to likely unsafe payment networks," said Rivenbark. "This would put our customers at a higher risk of fraud and data breaches, and put our business and our reputation at risk. All it takes is one fraudulent transaction for us to lose a customer's business."
According to the National Association of Convenience Stores, the Credit Card Competition Act (CCCA) aims to reduce credit card processing fees by allowing merchants to select from multiple networks for transactions. Critics argue that this could undermine payment security by compelling banks to use networks with potentially weaker fraud protection measures. This scenario may lead to heightened risks of data breaches and fraudulent activities affecting both consumers and businesses.
The Electronic Payments Coalition reported that the proposed act, also known as the Durbin-Marshall bill, might cost the U.S. economy approximately $227 billion and result in the loss of 156,000 jobs over ten years. The study emphasizes concerns about increased fraud risks and higher costs for merchants, which could adversely affect consumers and businesses alike. Business owners are apprehensive that potential job losses and economic challenges could outweigh any benefits from reduced processing fees.
The National Retail Federation (NRF) indicated that less than one-quarter of consumers trust credit card networks to secure their payment information effectively. This statistic underscores growing apprehensions about data breaches and transaction safety, particularly if the Credit Card Competition Act is implemented. Business owners fear that diminished consumer confidence might negatively impact sales and customer loyalty.
Rivenbark oversees business operations and customer relations at Jars Hospitality, where he applies his extensive experience in the hospitality industry along with an MBA degree. He remains committed to upholding high standards of service and business integrity.