CHARLESTON, S.C. (WCSC) – Lowcountry business owners are concerned about whether a bill in Congress has the power to stunt the state's economic growth.
The Durbin-Marshall Credit Card Act, or the “Credit Card Competition Act,” would change the regulations on how these transactions are processed. Senate Majority Whip Dick Durbin says the goal is to increase competition in the retail and consumer industries by capping exchange fee rates for big brands like Visa and MasterCard.
While some small businesses have responded positively to the bill, others in the Charleston area argue it could pose a risk to the Palmetto State's fiscal health.
“Cashback, airline miles, hotel points. All of these credit card rewards programs will be effectively eliminated. Consumers, small business owners, and most importantly, the tourism industry stand to lose. '' said Gene Kirby, former president of the Consumer Bankers Association.
Tommy Doyle owns a horse-drawn carriage tour business in the downtown Charleston area. Palmetto Carriage Works has been a fixture in the Lowcountry since its founding in 1972.
“Really, I've been running commercial vehicles most of my life. I've never had any other job,” Doyle says. “We carry hundreds of thousands of passengers a year.”
A report from the College of Charleston Tourism Office says the economic impact of tourism cannot be overstated. It will reach an all-time high of $12.8 billion in 2022, and the industry employs more than 51,000 people in Charleston alone.
Doyle said they were happy to cover the credit card fees because it worked well for them.
“Last year, I did a report on the percentage of my business that was credit card, and it was almost 90%. Especially since Charleston is so expensive to visit, people are taking advantage of these rewards programs. “I think so,” Doyle said.
A bill passed in 2010, known as the Dov-Frank Act, eliminated debit card points and rewards programs for many regulated transaction uses.
Mr Kirby said the result was a much better buy for big retailers, leaving small business owners in a pinch.
“It did the same thing and changed the way interchange fees were calculated. Big retailers like Walmart, Target, and Amazon added billions of dollars to their bottom lines. They passed it on to consumers. That didn't happen,'' Kirby said.
“Big retailers have a little more power to negotiate commissions and percentages,” said Tommy Doyle, owner of Palmetto Carriage Works. “We're running a lot of money here, but compared to Target, Costco and Walmart. There's also an argument that the big retailers are going to make more money and the smaller retailers are going to be squeezed out even more.” Maybe.”
Of the 486 million credit cards in circulation nationwide, 41% are travel-related and 25% are airline-related, Kirby said.
Both Kirby and Doyle fear the Palmetto State could lose millions of dollars.
“The number of people coming to Charleston is going to change dramatically, and it's going to go to small business owners in downtown Charleston and all over the Lowcountry,” Kirby said.
“The system we have now is working well and business is thriving,” Doyle said. “The impact of that law, if passed in any way, would probably be more negative.”
Sens. Lindsey Graham and Tim Scott did not respond to requests for comment on how the bill would affect South Carolina or when they would vote on it.
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