What’s at Stake in Connecticut
Connecticut lawmakers have introduced legislation to completely upend the way your credit and debit cards work – creating confusion for consumers, higher costs for small businesses and jeopardizing your privacy.
Interchange benefits business and consumers
Businesses pay a small percentage of each purchase – approx. 2% – for credit and debit card processing services. That fraction is used to safeguard credit card networks, prevent fraud, and fund reward programs families of all incomes use for essentials like groceries and gas or to help afford family trips.
But bills in Connecticut would create a carveout so the tax portion of your purchase is processed differently.
A massive handout to corporate mega-stores
So why change the easy, convenient, hassle-free and secure credit and debit card system we rely on every day? Because corporate mega-stores, grocery conglomerates, and the largest convenience store chains are trying to pocket more money.
A burden to small businesses & consumers—and the small, local community banks and credit unions that serve them.
But small businesses can’t afford this change. If SB 1460 passes, Connecticut small business owners, who are already on tight margins, could have to pay for new card processing systems and implementation of new accounting headaches.
Worse yet, to ensure your transaction is accurately processed under the new changes, businesses could have to share additional information about the purchases you make –potentially compromising your privacy.
For Connecticut’s small, local community banks and credit unions, interchange fees help cover the real costs of maintaining debit card programs, which include cybersecurity, fraud prevention, 24/7 customer service, and transaction processing.
This is why no other state in the country or no other country around the world currently processes credit and debit card transactions this way. In fact, 29 other states have rejected this idea because of the impact and hurdles it would have on commerce across the state – just so the big corporations can make more money.