Paying an average of $4,000 to $6,000 in "swipe fees" each month, Bob Byers, owner of Byers Exxon stations in Reno and Newport, said he's glad to see the federal government taking a look at credit and debit card fees.
As part of last year's financial overhaul bill, new rules are going into effect next month aimed at capping the amount of money banks and card companies charge businesses when customers pay with their cards.
Currently, the fees average about 44 cents per swipe but debit cards are expected to be limited to 12 cents per transaction starting July 21.
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BRAD BAUER The Marietta Times
Nick Pugliese, manager of Tiber Way Grille and Country Store, 10 Tiber Way, Marietta, swipes a debit card Thursday at the business.
The Federal Reserve board is expected to meet next Wednesday to finalize the rule to limit the fees that can be charged.
"The fees are awful and just way too high," Byers said. "But you pay them because (having the ability to accept credit and debit cards) has become a necessary evil of doing business. We just couldn't do business without them anymore."
Byers said he tried to make up for some of the losses by charging card users a few cents extra for gasoline but discontinued the practice when pressed by officials at Exxon. Like many area businesses, he maintains a $5 minimum for purchases.
Fact Box
About "swipe fees":
Currently, the fees average about 44 cents per swipe, but debit cards are expected to be limited to 12 cents per transaction starting July 21.
The Federal Reserve board is expected to meet next Wednesday to finalize the rule to limit the fees that can be charged.
"On top of the percentage (banks and card companies) take, we're also charged 10-cents for each swipe," he said. "If you buy a $1 candy bar, I might make 10-cents. But what am I making after a 10-cent fee and 2.5 percent processing fee? Sometimes you have to really watch because the profit margins are so close that you end up with a break even, or a loss, because of the processing fees."
According to the Associated Press, merchants are currently paying banks and card companies $16 billion annually in swipe fees.
In response to the potential loss of debit card revenue, some banks have started increasing fees and minimum balance requirements for checking accounts. Also, some banks have announced they will cut back or eliminate debit card rewards programs.
Local bank officials did not return messages seeking comment on Thursday.
Nick Pugliese, general manager of Tiber Way Grille and Country Store, 10 Tiber Way, Marietta, said cash customers are his favorite but are becoming more and more scarce.
"Last year, about 35 percent of our business was debit and credit cards," he said. "This year, it's about 50 percent."
Pugliese said his contract with a card processing company is up next month -at about the same time the new rules are set to go into effect. He hopes it means better profit margins for his locally-owned business, he said.
"When we first started out on Muskingum Drive (about 15 years ago), we didn't accept credit cards," he said. "When we moved downtown, we realized we were losing a lot of business by not accepting them. You hope they pull out cash, it's the best way to do business, but if they don't, you take what you can."
Ben Hufford, 33, of Vienna, was doing business in downtown Marietta Thursday. He said before he ever enters a shop or restaurant, he looks for the credit card logos on the door.
"I never have cash," he said. "I just think it's easier to use plastic. I always have a record of my transactions and they're good almost everywhere."
Hufford said he isn't bothered by the potential loss of rewards programs. He said he would be annoyed if he was required to pay a fee for a checking account or had to keep a minimum balance.
"I think most people just expect free checking and those sorts of things," he said. "The rewards are nice but not really important."
