When the credit card bill got signed into law last May this year, credit card holders rejoiced for what seemed like the respite to long years of having to deal with what they consider as unfair and predatory practices of credit companies. The law will put a stopper on the ability of credit card companies to raise their interest rates and their fees arbitrarily and will level the playing field somewhat for credit card holders. Unfortunately, there is not a single legislation in the bill for small businesses.
Small businesses are one of the biggest sectors in society that credit card companies get their profits from. One of the biggest pay-offs that credit card companies get are from the transaction fees that they charge on businesses every time a consumer opts to pay for their purchases with their credit cards. According to the National Association of Convenience Stores, a total of 8.4 billion dollars can be attributed to convenience store purchases from the profits that credit companies got last year, 2008. The figure is up by 10.5% from those of 2007. All in all, it totals to profits of upwards from 5.2 billion dollars for the credit industry, the National Association of Convenience Stores said.
Obviously, transaction fees are a prickly issue among small businesses. This week, 7-Eleven aims to solicit a million signatures for a petition to Congress for the correction of the biased and excessive transaction fees of credit card companies. As it stands now, credit card companies put charges on retailers for every credit card transaction that they accept. Small companies like 7-Eleven are irked by the fact that charges are placed no matter how small the transactions are and that they are completely powerless to negotiate with the credit companies for better fees.
The 7-Eleven campaign is being seen by many as a “Main Street” issue, particularly because around 75% of all 7-Elevens are franchises and the movement is being led mainly by the owners of these small businesses.
Around 146,000 7-Eleven stores all over the nation is going to join in on the lobby. Petitions are being put up and displayed prominently at the checkout counters of these 7-Eleven stores.
7-Eleven certainly has just cause to lead the charge. The convenience store chain accounts for 160 million dollars of the profits that the credit industry saw for the last year. If the lobby proves successful, it could mean some positive changes in transaction charging practices for small business.
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