SAN FRANCISCO
— Hidden fees lurking
behind credit card transactions with
small businesses would be terminated
if federal legislation is approved.
That could also lead to the
elimination of minimum transactions
businesses require of customers to
pay for the fees.
Sam
Hanna, owner of FM Smokes & Snacks
in SoMa, has a sign posted on his
cash register that reads “$10 credit
card minimum, 50 cent fee for ATM.”
Without it he will not break even on
the fees he’s charged by credit card
companies, Hanna said. “They cheat
people legally,” he said.
Because of the increase in hidden
fees and lack of transparency, Reps.
Peter Welch, D-Vt., and Bill
Shuster, R-Penn., introduced the
bipartisan bill known as the
Welch-Shuster Credit Card
Interchange Fees Act of 2009. It
would require companies to disclose
their fees for swipes, terms and
conditions. The bill will be debated
in the House Committee on Financial
Services.
Currently, business owners have
difficulties negotiating the fees or
even telling their customers what
they are being charged. The result
is a Byzantine process for
small-business owners who attempt to
have the charges reduced, according
to Janet Clyde, co-owner of the
North Beach bar Vesuvio and a member
of the Small Business Commission.
Throughout the year, credit card
companies increase the percentage
they charge businesses for
transactions, but many do not take
the time to challenge the fees.
Last year, banks reportedly made
more than $48 billion in fees, which
vary per business. They are based on
a contract with the processing
company that swipes the credit card.
Hanna said those hidden fees cost
him $700 a month. When he calls to
inquire, he said, the credit card
companies claim they don’t know what
the fees are for.
Scott Hauge, president of Small
Business California, said
transparency and regulation of
credit card companies is something
the business association has been
pursuing for a long time.
“It’s part and parcel to the whole
problem with credit cards,” he said.
“There’s no transparency. They don’t
have a clue what [customers are]
getting charged for.
The
swipe fees are one of many added
expenses businesses in San Francisco
pay. Others include high minimum
wage and payment’s to The City’s
universal health care program,
Healthy San Francisco.
Regardless of the law, Rania Sayija,
co-owner of Sausalito Espresso on
Mission Street, said she does not
charge a minimum purchase because as
a consumer she does not always have
cash.
“So
many people use credit cards now,”
she said. “I don’t want to tell
someone they can’t buy something if
they don’t have cash.”
akoskey@sfexaminer.com
