A $50 Billion Suggestion to my Congresswoman.
A $50 Billion Suggestion.
I feel a strong need to bring to your attention the scam that banks are perpetrating on small business and ultimately the public in general. It is the "interchange" fees that they apply as a percentage of every sale. This percentage can range from 1 to 3 or more percent depending on the credit card the purchaser uses. Most other developed countries in the world have capped this fee to be something like 0.3%; I think that is wrong-headed, overreaching, and anti-free market. However, the bill "H. R. 5546" is also ridiculous; A bill written by overbearing members that don't want to solve a problem as much as they want it to sound like they are solving problems.
There is one thing that a vendor must be allowed to do that I think would fix the problem as the free-market should: print the credit card interchange fee on the receipt. A receipt would then show the price of the product, the appropriate sales taxes, and also the credit card interchange fee. And the credit card application should disclose this as a percentage as well.
The intended result of this is to inform the consumer. That is all.
The ripple effect might be that stores will be able to lower their prices. And then add on the interchange fee to get back to the real cost. The consumer would be able to choose a credit card that had the lowest interchange fee. And the bank would be induced to remove the fee all-together and instead charge the appropriate annual fees on the card for the specialized services they attach to the card. It has also been noticed that when the banks can no longer fund airline-miles, and cash rebates, ... with the proceeds from interchange fees, that they will compete by reducing the APR.
Without this change consumers will continue to be charged higher prices at the counter in order to create higher, unfair, anti-trade profits for banks to the tune of about $50,000,000,000 / year.