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The Credit Card Competition Act would harm Missouri’s small businesses


The Credit Card Competition Act would harm Missouri’s small businesses

Apr 23, 2024 | 6:50 am ET
By Ashley Nordman
The Credit Card Competition Act would harm Missouri’s small businesses
(Joe Raedle/Getty Images)

As any small business owner knows, the customer experience is just as important as the quality of products or services we offer. For my wellness and beauty business, AN Skin & Beauty in O’Fallon, my customers expect and depend on being able to shop our products in my store and online with ease and peace-of-mind.

Something often taken for granted in making the shopping experience both hassle and worry free for all parties is the innovation that enables instantaneous and secure processing of customer payments over networks that link my payment platform to the customer bank and my business bank.

Thanks to this effective system, our customers can make purchases trusting that their financial information will be protected and handled safely.

The current system fosters trust. Customers trust that their information is safe, and I trust that payments go through securely, protected from fraud thanks to the protections of the current system. This allows me to focus on what truly matters, running my business and providing top notch customer service to my customers.

Because my business relies so much on the security benefits offered by the current digital payment system, I’m deeply concerned that the U.S. Senate is considering a bill that threatens the safety of digital credit card payments, and that unfortunately, Sen. Josh Hawley has recently signed on as a sponsor.

The bill, misleadingly titled the Credit Card Competition Act (CCCA), would open up credit card processing to untested, less secure payment networks, significantly increasing the risk of fraud and data breaches.

If forced to use these alternative, less secure payment networks, the consequences for small businesses like mine would be dire. We would lose customer support and trust, severely damaging our reputation and, ultimately, our bottom line. This is a risk small businesses like mine really can’t afford to take. And the small business owners I know don’t have the time to be picking and choosing between various payment networks, especially when the current system works well.

The CCCA’s impact extends far beyond just security concerns.

Not only would the legislation make credit cards less secure to process, but it would also reduce the funding banks and credit unions use to invest in fraud prevention and other credit card security features, which protect us and our customers. Large retailers might be able to afford the consequences of data breaches and fraud, but real small businesses like mine don’t have that same luxury.

Although the supporters of this bill claim it will help small businesses save money, I’m concerned that only larger retailers will see any true benefits if it passes. Small businesses don’t have the same leverage that these large merchants have to negotiate lower rates for themselves, meaning small business owners like me would get stuck with higher costs while the large corporations pocket any potential savings that would come from the bill.

The consequences of this bill don’t stop there.

According to a recent University of Miami report, if the CCCA becomes law, small businesses would lose out on an estimated $1 billion in rewards points under this new system. The points that I earn through purchases I make on my business credit card go a long way to helping me finance business purchases and travel and supporting my employees, which helps keep my business expenses low. Taking these reward points away would be a significant blow to my company’s financial stability.

I have no doubt that the success of small businesses like mine depends on the safety and rewards provided by the existing credit card payment system. Putting this at risk not only risks the trust our customers place in us, but also puts at risk our ability to compete and succeed.

I want to remind Sen. Hawley and Missouri’s representatives in Washington that small businesses are the backbone of the U.S. economy. We are the driving force behind innovation, job creation, and economic growth.

Congress should prioritize legislation that empowers and supports small business owners. We need an environment where we can thrive, not one that risks our security and livelihoods by undermining the tools we need to run our businesses.

By protecting the secure credit card network that maintains the current rewards points system, Congress can continue to empower small businesses like mine, allowing us to continue being the engine of the American economy. This is not the time for untested experiments with our financial security. We need a system that fosters trust, not fear.