Small businesses “coping” with increasing credit card fees
Scott Colwell, the owner of the Certainly Cinnamon, says that it is not just the consumers, but even retailers who are bearing the brunt of the ever increasing fees on credit cards. Speaking during an interview on Thursday, he said that he pays a staggering $1000 a month towards credit cards fees.
In addition to Certainly Cinnamon, Colwell is also the owner of Quality Inn’s Wooden Door Bistro that is located close to Halifax Stanfield International Airport. His restaurant also caters to parties and weddings, but he does not accept payments for these orders through credit cards. Justifying this, Colwell says he prefers not to accept credit card payments for large orders because of the high fees they attract. When saved, this amount can be channelized towards other business improvement opportunities.
One of the biggest disadvantages is that small business credit cards are not covered under the rules and regulations of the newly implemented CARD Act. Hence, there is no limit on the interchange fee that the banks levy for purchases made using these cards. This not only affects small business owners who use the card, but also the merchants who accept these cards for transactions. The fees levied for the transaction varies from one lender to the other and sometimes can be very high.
Most retailers are now refraining from accepting small business credit cards for billing purchases. This leaves business owners with no option, but to pay either through checks or cash.