Karen Fountain, AAF, of Flowers 'n' Ferns in Burke, Va., at the press conference with Rep. Peter Welch (D-At Large-Vt.).

Retail florist, and SAF member, Karen Fountain, AAF, of Flowers 'n' Ferns in Burke, Va., knows the costly impact interchange fees associated with credit cards can have on small businesses.

She just doesn't know exactly how big that chunk is until after the fees have taken a bite out of her shop's bottom line.
 
"Unlike when you receive a credit card bill at home and they let you know the interest fee is increasing, we aren't told ahead, it is just charged without notice," Fountain says.

Fountain, who has seen a steady increase in the use of credit and debit cards, points out that part of the problem is there is no way for her to know which bank charges what amount until she actually sees the bill.

She shared her perspective on — and frustration with — the fees, at a recent press conference on interchange fees held by Rep. Peter Welch (D-At Large-Vt.) in the Capitol. The Merchant Payments Coalition, which is working to pass legislation to lower credit card interchange fees, asked SAF to recruit a florist to participate in the conference alongside a restaurant owner and consumer advocate. At the June 11 conference, Welch introduced legislation that would require credit card companies to disclose their interchange rates, terms and conditions to consumers, businesses and the public. The legislation also calls for the Federal Trade Commission to review those rates and rules and prohibit any practices that violate consumer-protection or anti-competitive laws.

Interchange fees in the United States are the highest in the world, accounting for as much as two percent of the cost of every credit card transaction, according to Welch's Web site. By comparison, fees in the United States are almost three times more than in Australia (0.7 percent) and four times what consumers and businesses pay in the United Kingdom (0.5 percent).

"Consumers and merchants are already getting squeezed by higher gas and food prices," Welch said during the press conference. "They don't need large credit card companies reaching deeper into their pockets to increase their profits."

For Fountain, the cost of accepting credit cards has increased from 1.75 percent to 3.1 percent over the last few years. "What I'm still learning is that the merchant is charged different rates for different cards," Fountain told E-Brief editors. "We think they are all the same, but one Visa may only have an interchange fee of 1.5 percent, but another Visa may charge 4 percent. There is no set rule as to which company charges what."

SAF supports the bipartisan Credit Card Fair Fee Act (H.R. 5546) introduced earlier this spring to provide an open and transparent process to negotiate credit card interchange fees. SAF also supports Welch's bill, which lets merchants give consumers who pay in cash a discount and bans penalties for small businesses that process only a small number of transactions.

"Karen did a superb job of explaining the impact of these rising fees on her small business," says SAF's Jeanne Ramsay, senior director of government relations.

Rising interchange fees add to a mounting pile of added expenses for florists. "As a business person, I'm always looking towards savings to pass onto my customers," Fountain says. "With the interchange fee, I have to figure into my everyday sales prices whether the consumer is using a credit card or cash."

--Morgan Schimminger
mschimminger@safnow.org

  

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