Report Shows Small Merchants Prefer Value over Price Controls
Javelin Strategy & Research and the Electronic Payments Coalition recently released a report that reveals that SMBs are more concerned with value rather than price in regards to the fees that they pay for debit card transactions.
“This Javelin study proves once again that Chairman Hensarling and the committee were right last year when they tried to restore the free market for interchange. Small merchants want choice not price caps,” said Molly Wilkinson, executive director of the Electronic Payments Coalition (EPC). “Over and over we’ve seen that the Durbin amendment benefited the largest retailers while Main Street lost. These price controls have unfairly burdened consumers, community financial institutions, and small businesses. By restoring the free market, small merchants will have greater flexibility to find the debit card plan that works for them and their customers.”
The study has a completely contradictory view of claims from retail lobbying groups, which have fought fiercely against getting rid of the 2011 price caps for retailers due to the fear it might harm smaller merchants. As it happens, the Javelin study found 66 percent of merchants are satisfied with what that they pay and that small retailers are even happier “when they are allowed to choose additional benefits even at a greater cost.”
The study also suggests merchants prefer credit cards, no matter the cost of the purchase, over debit cards even though credit cards tend to have higher costs, further underscoring that price is not the driving factor for merchants.