Valley business owners raise concerns over credit card swipe fees

Visa recently announced it will be increasing two of its fees. That is the misuse fee paid by merchants and a base transmission fee paid by financial institutions. Now small businesses worry they may take the brunt of the hit from these fees. Taking away from their already tight margins and costing their customers. We can't be unfairly targeted just by huge corporations that are forgetting about how hard it is to make money as a small business. The Valley's classic enchiladas. Specializing in authentic and homemade Mexican food. For over 100 years the restaurant has been around. But recently they've had to raise some of their prices to keep up with costs. We began charging a surcharge for credit card use, credit card processing. Wendy Locher who handles the restaurant's finances says the business has been hit with an overwhelming amount of credit card fees. As more customers ditch cash. We take way less cash than we used to. It's almost all credit cards. So that kind of multiplies the impact of the processing fees on our business. In 2023 alone the restaurant paid $167,000 in credit card fees. The first person is the brand. Visa, MasterCard, that sort of thing. They take a flat rate. And then there's the issuing bank. That's Chase, Wells Fargo, Citibank, whoever it is. They're the issuer. They have a whole other set of fees. Now those two together is about 80% of what I pay. While the restaurant grapples with these charges, credit card company Visa announced this year it will be increasing swipe fees. And critics like the Merchants Payments Coalition say this will only add to the stress small businesses face. Small businesses are really getting crushed by these credit card fees. The fees have gone up dramatically. In fact, since 2010, the fees have quadrupled on Visa and MasterCard credit cards. For years critics have been fighting credit card swipe fees. But supporters like the Electronic Payment Coalition say these fees are necessary. The only reason merchants may be paying more for credit card services is because they're using their credit card more. The more you use the credit card, the more you're going to pay for it. It's common sense. Lawmakers are discussing credit card costs, but local businesses like Enchilada's hope more will be done to protect them. The fact that we're talking about it, the fact that multiple states are talking about getting this legislation done gives us some hope that maybe it will get a little bit reined in. And something really interesting, starting this year, Illinois will become the first state in the nation to enforce a law that exempts merchants from paying fees on tax and tips. So that'll be really interesting to kind of see how this all plays out. This will actually go into effect in July. And then we did reach out to Visa for a statement, so I will read this. They said, in part, we are constantly enhancing our network to better serve the businesses and consumers. Everything we do is designed to make paying and being paid with Visa more convenient, secure, and reliable. And we want to support our local businesses and do all we can. Maybe just carry a little cash sometimes. Yeah, yeah. And that's always a good option. And that surcharge that the restaurant that we talked to today said, that is on big events like banquets and stuff. They aren't planning on raising any of their food prices anytime soon or anything of that sort. I did ask that. But again, it is hard. Everything does kind of build up. So it's just something that they are kind of grappling with right now. Michaela, thank you. Thanks, Jamie.