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Businesses facing the brunt of heavy credit card fees
[12:00:00 AM Saturday, May 14, 2011]
A number of retailers and restaurant owners are complaining that the increasing fees on credit cards are hampering their business. Most of them met at Lansing to discuss problems that are not just plaguing the retailers and owners, but also consumers.
Every time a consumer uses a debit or a credit card at a restaurant, it eats into the profits of the owner. The Michigan Restaurant Association has said that it takes payment processing service provider about 4 cents to process any payment. However, they charge 10 times this amount, irrespective of the billed amount. Many other business owners also voiced their opinion saying that it is becoming increasingly tough for small business owners to make profits considering the fees being charged per transaction.
This is not just affecting businesses, but also consumers who use the card to pay for purchases at stores and meals at restaurants. A member of the Michigan Restaurant Association, Andy Deloney, said that business owners have to charge customers more since the fees charged by processing majors Visa and MasterCard are really high. This is not revealed to consumers and is collected as hidden tax.
One of the restaurant owners, Tom Vonchen, said that the number of customers not opting for cash is increasing by the day. Business owners are left with no choice but to accept this fact, though it means losing a significant amount of money. The good news is that Congress has approved a legislation that caps the swipe fees at 12 cents; however, this is scheduled to come into effect only from July this year.
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