Tired of having to meet a $10 purchase minimum at a convenience store or getting an extra buck or two tagged onto your purchases, just for using a credit card? Well, under a provision of the Credit CARD Act, swipe fees and other charges have been lowered, to the relief of consumers and merchants alike. However, it’s not good news for everyone, including Visa and MasterCard. The two credit card giants are expected to see a sharp decrease in revenue due to the lower swipe fees over the next year.
In 2009, merchants paid nearly $20 million to Visa and MasterCard members’ banks as a result of consumers swiping their cards. The San Francisco Chronicle notes that while the issuers didn’t directly profit from small businesses, they were the ones who originally set the fees.
“We’ll be delighted to see the fees go down,” hardware store owner Rick Karp told the paper. “Banks have been getting away with murder for some time now. About three cents of every dollar spent in our stores goes to banks for the use of the cards.”
Lower swipe fees may give vendors an incentive to offer more discounts and encourage spending. As the economy continues to struggle with lower consumer spending levels, merchants are looking for new ways to induce shoppers to open their wallets and purses.
