I am a small-business owner in southern Maine. We are a 15-person company that has been family-owned and -operated since 1996. I’ve witnessed firsthand the challenges that come with operating in today’s economy. From navigating fluctuating consumer demands to adapting to inflationary pressures and managing overhead costs, every decision we make affects the livelihood of our employees, the sustainability of our business and our customers’ experience.

One issue that continues to weigh heavily on Main Street businesses like my own is the exorbitant fees set by credit card companies and charged by card-issuing banks for each transaction: swipe fees. These fees act as an inflation multiplier and a hidden tax on hard-working Mainers.

Inflation continues to hit families hard. According to the latest data from the U.S. Bureau of Labor Statistics, Maine ranks third for the highest grocery prices, only trailing Hawaii and Massachusetts. The price of auto insurance offers another clear example, increasing nearly 20% from November 2022 to November 2023.

What many consumers may not realize is that every swipe of their credit card further diminishes the value of their dollar; merchants are forced to fork over a percentage of each transaction to credit card giants and major Wall Street banks.

The impact on small businesses cannot be overstated. With profit margins already razor-thin, being forced to absorb these high swipe fees only adds to our financial burden. In fact, for many businesses, swipe fees now surpass basic expenses like insurance and utilities – a staggering reality that threatens the survival of Main Street enterprises. Lowering these fees would allow me to hire additional staff.

Maine Sen. Susan Collins has previously spoken about the need to regulate swipe fees, recognizing the burden they place on small businesses like myself who lack the bargaining power of larger retailers. She rightly pointed out that these fees have become a major cost for small businesses like mine, and in a struggling economy, every penny counts.

Fortunately, there is a solution: the Credit Card Competition Act. This bipartisan legislation aims to inject much-needed competition into the credit card market by providing merchants with a second routing option to process a transaction on. Increased fair market competition in the processing sector will effectively drive down swipe fees for merchants and ultimately pass those savings on to consumers.

One crucial aspect of this legislation is its targeted approach. The bill specifically targets financial institutions with assets exceeding $100 billion. According to the Federal Reserve, this criterion narrows down the affected banks to a mere 28.

This means not a single community bank or small credit union in Maine would be covered by this legislation. This targeted approach safeguards the interests of small businesses and local financial institutions alike.

Visa and Mastercard’s stranglehold on the market must be broken. With over 80% of the market share, this duopoly raked in over $100 billion in swipe fees for the first time last year, jumping more than $7.5 billion from the year prior. Scared of seeing a reduction in money pouring in off the backs of American small businesses and consumers, it’s no surprise these corporations are reportedly spending millions to convince decision-makers that the Credit Card Competition Act is anything but the financial relief Main Street needs.

I hope Congress will consider the negative impact of rising swipe fees on small businesses like mine and support the passage of the act, which will pave the way for a more prosperous future for Maine’s economy.

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