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Guest Column: Congress Should Pass ‘Credit Card Competition Act’

Rupal Patel: Current system is “neither fair nor sustainable.”

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by RUPAL PATEL

As a convenience store owner in the picturesque state of South Carolina, I’ve had the privilege of helping fuel travelers passing through the state as well as supplying local community residents. Our small business, like many others across the Palmetto State, is an integral part of our local economy. However, the looming specter of rising credit card swipe fees, particularly from industry giants Visa and Mastercard, threatens Main Street. 

In the retail industry, where competition is fierce and margins are often thin, credit card swipe fees are an ongoing challenge. Every time a guest swipes, inserts, or taps their card to pay for gas or purchase a candy bar, anywhere between two and four percent of that payment goes straight to the coffers of Visa, Mastercard, and the big banks. While that may not sound like much, these fees add up significantly — costing businesses nearly $130 billion in 2022 alone.

To add insult to injury, Visa and Mastercard are planning to begin increasing credit card fees this month by an additional $502 million annually. At a time when small businesses are doing their best to get past the historic inflation of the past two years, these fee hikes could not come at a more inopportune moment. For us, it means less money to invest in maintaining our store, providing exceptional service, and supporting our local community. 

The problem lies in a lack of competition in the credit card market. Today, Visa and Mastercard control about 80 percent of the industry, which has allowed them to more than double the price of swipe fees over the past 10 years. And while these credit card giants continue to report record profits, small businesses across South Carolina are grappling with the ballooning financial burden.

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Fortunately, federal legislation currently gaining traction in Washington — the Credit Card Competition Act — offers a glimmer of hope for small businesses struggling under the weight of these fees. 

By injecting competition into the credit card market, the Credit Card Competition Act would give businesses more options on how to process credit card transactions. As a result, businesses would have the ability to negotiate for better rates, while credit card companies would be incentivized to lower swipe fees to compete for our business. Experts estimate this legislation would save small businesses upwards of $15 billion annually

The Credit Card Competition Act is a practical solution that can alleviate the financial pressure we face daily. Competition drives innovation and efficiency in any industry, and it’s high time we applied the same principles to credit card processing. And it’s not just convenience stores that will benefit from this legislation. Restaurants, hotels, and countless other Main Street businesses throughout South Carolina will be able to invest more in their operations and employees, ultimately strengthening their local communities.

Small businesses are the lifeblood of South Carolina’s economy, employing nearly half the state’s workforce and contributing to our state’s unique charm. Yet, we find ourselves trapped in a system where the balance of power overwhelmingly favors the credit card giants. This is neither fair nor sustainable.

The time for action is now. And the Credit Card Competition Act represents a lifeline for the state small business community. I urge South Carolina’s elected leaders in Washington to support this bill, so small businesses like mine can have a fighting chance.

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ABOUT THE AUTHOR …

Rupal Patel is the owner of Coastal Petro in Myrtle Beach, S.C.

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ABOUT THE AUTHOR …

Will Folks (Dylan Nolan)

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven (soon to be eight) children.

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5 comments

Observer (the real one) October 26, 2023 at 1:45 am

I agree with Ms Patel. For all the good it will do, I will contact my Congressman and urge him to support this. Corporate greed never ceases to amaze me.

Reply
Joseph Jeter Top fan October 26, 2023 at 6:50 am

You don’t fix corporate greed (or most other problems) with legislation. There’s already competition among credit card processors and retailers can either offer products at a higher price or list a separate cash price and let consumers decide.

Reply
Happy&Lucky Top fan October 26, 2023 at 5:15 pm

Actually you do fix corporate greed with legislation. What comes to mind first are Antitrust laws. And according to this well thought out and articulate letter, the two biggest credit card companies control 80 per cent of the market. Additionally, I’d be reluctant to raise prices for the consumer.

Reply
Ron October 26, 2023 at 11:17 pm

actually you do.

this is a good column. those fees are ludicrous and the highest in the world.

Reply
That's In The Bible October 26, 2023 at 9:30 am

Regulate usury out of existence and forgive smaller debts like credit card loans after 7 years so there is a hard limitation on how much blood these leeches can suck from people.

More than just about morality, you need to hit them in the wallet if you want to put a limit on how much money they can burn to influence state and federal governments to rig the game in their favor.

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