Credit card swiping fees are hitting small businesses. Illinois legislators can help.

On the Money 5 Card Prks

The more than 30 years I’ve spent at the corner of North Dearborn and Maple streets as a 7-Eleven franchisee have been some of the best of my life. Since I first opened my store doors, I have been able to support my community through thick and thin. But now, it’s harder for me to keep the lights on and serve Chicagoans because of the increased credit card transfer fees.

This problem has been a long time coming. On every purchase, the credit card companies will impose a processing fee, or what most Americans know as a “swipe fee.” Unfortunately, the credit card processing market is unfairly biased against small businesses, as only two companies, Visa and Mastercard, can monopolize the rules.

When I first opened the store in 1988 in a location now known as “Honorary Joseph Rossi Way”, 20% of my customers paid by credit card, while 80% used cash. Those numbers have since changed, as a shortage of change and the COVID-19 pandemic further increased shoppers’ reliance on credit cards. For Visa and Mastercard, this change in consumer habits has been a blessing. For me, not so much.

I had no choice but to increase the price of many of my products to offset these rising slippage fees and slow down the hiring for open positions. While I always want to avoid raising prices and creating pain points for my customers, the credit card business has put me between a rock and a hard place.

These companies are double dipped. Not only can they automatically make more money from slipping fees due to inflation, but they also do so by directly increasing fees. You couldn’t ask for a clearer example of highway robbery.

It’s not just my business that’s suffering. The convenience store industry as a whole lost more than $13 billion to pass the fees in 2021, while the average 7-Eleven store pays an average of $85,000 each year on these fees alone. Many businesses have found themselves completely at the mercy of the credit card companies.

It’s scary to consider that I may not be able to support the community in the same way that I once did because of transfer fees. In previous years, I have donated to both my local school district and Lurie Children’s Hospital, but that may be more difficult this year and next due to these additional costs.

Legislators can make a difference

Congress is trying to clamp down on unregulated slippage fees and restore competition within the credit card industry. A group of US House and Senate lawmakers on both sides of the aisle introduced the Credit Card Competition Act, which would require the largest US banks to offer other networks to process transactions of credit.

Sen. Dick Durbin, D.-Ill., is a major sponsor of the legislation and should be applauded for his efforts to help small businesses in such a difficult economic time. The entire Illinois congressional delegation, particularly those representing the Chicago area, should follow Durbin’s lead and support this measure.

In all my years of business, I have been able to withstand the worst circumstances, from shoplifting incidents to the COVID-19 pandemic. But runaway slippage fees are a serious new challenge that can be nearly impossible to overcome. Washington must restore competition to the credit card industry or else Visa and Mastercard could put my business, and others in Illinois, right out of business.

Joe Rossi is the owner and operator of a 7-Eleven franchise in Chicago and a member of the Midwest Franchise Owners Association.

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