FMI Statement on Impact of Interchange Fees on Small Businesses

ARLINGTON, VA — July 29, 2010 — The Food Marketing Institute (FMI) issued the following statement from Jennifer Hatcher, senior vice president of government relations, about today’s hearing by the U.S. House Small Business Subcommittee on Investigations and Oversight about the impact of interchange fees on small businesses:

     “There is nothing more frightening for a small business than an unpredictable cost increase that is not budgeted for, especially when the increase is excessive. Credit and debit card interchange swipe fees are increased at the whim of the Visa and MasterCard card networks and are completely unpredictable.

     The grocery industry operates on roughly a one to two percent profit margin, while interchange fees average roughly two percent. These fees are one of the fastest growing expenses for the supermarket industry but these fees are putting a real squeeze on small businesses that have the most difficult time absorbing the rising cost.

     We are confident the Durbin interchange fee reforms will benefit our customers and our industry. One such reform will give retailers increased protections from Visa and MasterCard’s excessive fines if the retailer offers customers discounts for cheaper forms of payments. Supermarkets will also be able to set minimum transaction levels on credit cards so that small businesses do not have to lose money on a transaction.

     Despite the progress made by the Durbin reforms, more change is needed to bring increased fairness and transparency to the interchange system to help protect small businesses that are the most negatively impacted by these fees.”