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Job Growth Hindered by Interchange Fees

Hefty credit card interchange ‘swipe’ fees prevent small business owners from hiring new employees

INDIANAPOLIS, Dec. 4 /PRNewswire-USNewswire/ — Consumers for Competitive Choice (C4CC) president Bob Johnson has a suggestion that will spur more job growth: interchange fee reform. The President and his economic team gathered yesterday to hear from some of the best and brightest CEOs, small business owners, and financial experts about ideas for continuing to grow the economy and put Americans back to work at a Forum on Jobs and Economic Growth. The meeting was held in advance of the Bureau of Labor Statistics’ announcement today that our national unemployment rate remains in the double digits, at an unsettling 10%.

Interchange fees are the charges that merchants, local governments, universities, or anyone else who accepts plastic, are assessed every time a transaction is completed by swiping or keying in a credit or debit card. Last year alone credit card companies received $48 billion dollars in these fees, this number up 300% since 2001. Not surprisingly, small business owners say that if they were not saddled with these skyrocketing fees, they would be able to spread those resources elsewhere – like hiring additional employees.

“In 1995, CN Brown paid $353,000 in interchange fees,” said Jinger Duryea, President of CN Brown, which owns Big Apple convenience stores across Maine. “In 2007, we paid $3,494,000 in interchange fees. This amount of money could stretch very far if any portion were available to us to hire additional employees or lower costs for consumers, rather than lining the pockets of credit card companies.”

Every dollar spent on interchange fees is a dollar not spent hiring workers or providing savings to customers. At an average cost of 2% per credit card swipe these fees add up quickly, and the potential savings or job growth that could result if the funds were not going to big banks and credit card companies is one that we cannot afford to overlook.

“With the national unemployment still at a troubling level, we have a very long way to go before this economy is where we need it to be,” said Johnson. “I have spoken with small business owners throughout the country these past few weeks and they all have one thing to say – credit card interchange “swipe” fees are increasing and are hurting both small business and consumers. This fact was recently supported by the Government Accountability Office’s report on interchange fees.”

“Interchange fees are currently the highest expense for small businesses behind payroll and healthcare. The cost is astronomic, and we don’t need a job summit to know that the jobs that could be saved or created if these fees are reduced are real. The numbers don’t lie. Any level of relief would be a significant step toward our economic recovery. With unemployment holding steady in the double digits and small business growth being impaired, it is imperative that our Representatives and Senators in Washington take steps to reduce this unfair burden, especially considering the economic impact such reform could have.”

About The Credit Card Con

The Credit Card Con is a project by the Consumers for Competitive Choice. For more information, visit The Credit Card Con website at www.thecreditcardcon.com.

SOURCE Consumers for Competitive Choice