In recent years, the escalating prices of essential goods such as energy, fuel and food have imposed a heavy burden on Nebraska families. This pressing issue calls for the focused efforts of our Nebraska senators to tackle the pocketbook challenges that directly impact the livelihoods of our residents.
One significant way to achieve this goal is by throwing their support behind the Credit Card Competition Act, a crucial bill designed to reduce swipe fees on every credit card transaction, ultimately leading to decreased costs for businesses and prices for customers.
In 2022 alone, the average increase in the prices of all items stood at 8%. This highlights the mounting financial strain on Nebraska families, making it evident that immediate action is needed.
But unbeknownst to many, there has also been a drastic increase in swipe fees. Credit card swipe fees, which aren’t transparent to consumers, increased more than 20% last year and are up more than 60% over the past three years.
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Among those hit hardest by inflationary pressures like rising swipe fees are the small businesses in rural Nebraska that form the backbone of our communities. These enterprises are extra-sensitive to high inflationary pressures, which severely impact their profitability and long-term sustainability.
Adding on an increase in fees for every credit card that is swiped puts these businesses under intense economic strain after already being confronted with the relentless inflationary pressures that have persisted over the past few years.
Fortunately, the Credit Card Competition Act would address this challenge.
Each time a customer in Nebraska uses a credit card for a purchase, the associated business is burdened with a "swipe fee." This fee amounts to an average of 2.2% of the transaction cost that the business is obligated to pay.
These swipe fees are determined by the credit card giants and subsequently collected by major financial institutions. Visa and Mastercard dominate approximately 80% of the credit card market, granting them the ability to raise swipe fees without restraint.
As a result of this lack of competition, Americans face the highest swipe fees among industrialized nations. This, in turn, forces the average Nebraska family to pay more than $1,000 more per year due to escalating swipe fees.
The CCCA would finally allow for competition in the payments marketplace long run by Visa and Mastercard. This proposed law would ensure that retailers have at least one alternative network choice to process credit card payments on, promoting competition in fees, security and customer service.
The impact of the Credit Card Competition Act on rural Nebraska cannot be overstated. By reducing swipe fees, this legislation will help rural businesses navigate the challenges of high inflation more effectively, enhancing their profitability and sustainability, ensuring their continued contribution to the vitality of rural communities.
Moreover, the reduced prices resulting from this act will directly benefit consumers in rural Nebraska, offering them much-needed financial respite and enhancing their overall quality of life.
It is time for Congress to focus on pocketbook issues affecting all American families. The alarming increases in energy, fuel and food costs are making it difficult for people to make ends meet.
By addressing the concerns of rural Nebraskans and implementing targeted policies like the Credit Card Competition Act, Sens. Deb Fischer and Pete Ricketts can ensure a more secure and prosperous future for all residents of the state.