What’s at Stake in Pennsylvania
The Pennsylvania legislature is attempting to pass a law that would completely upend the way your credit and debit cards works – creating confusion for consumers, higher cost for small businesses and the potential for information about your private purchases to be shared. The proposal would create a carveout so the tax portion of an overall purchase is exempt from card processing costs known as interchange.
Businesses pay a small percentage of each purchase – approx. 2% - to process your credit and debit card transactions. That fraction is used to safeguard credit card networks, prevent fraud, and fund reward programs.
So why are politicians trying to change the easy, convenient, hassle-free credit and debit card system we rely on every day? Because the largest convenience store chains and corporate mega-stores are trying to pocket more money. But it means small businesses will have to pay for new card processing systems to save on a small fraction of transactions and consumers could have pay taxes in a separate transaction or with cash or check. Worse yet, to ensure your transaction is accurately processed under the new changes, businesses are going to have to share additional information about each and every purchase you make.
This is why no other state in the country or no other country around the world 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 guys can make more money.
Take Action
Tell your state’s leaders Pennsylvania cannot afford the credit card chaos this experimental bill will cause. Small businesses cannot afford the new costs and cardholders will not tolerate the loss of convenience and privacy these new changes will bring – just so corporate mega-stores and nationwide convenience chains can pocket more money. The current credit and debit card processing system works and provides a valuable services by facilitating efficient purchases, universal acceptance and state-of-the-art protections against fraud and personal identity theft.
Avoid Credit Card Chaos
This new change would bring about credit card chaos for both consumers and small businesses, here’s why:
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Private information about what consumers are purchasing will be required to be shared, eliminating the privacy protections that exist today.
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Under the new law, consumers could be forced to pay sales tax in cash or check. Purchases will require two transactions – one for the goods or services and another for taxes and tip. As retailers look to eliminate the hassle of multiple transactions or filing for monthly refunds, some may be forced to require that tax be paid in cash. Customers who have grown accustomed to shopping with only their phone or a single card will also need to start carrying cash.
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Smaller merchants will bear the cost burden of complying with the new law, whether through new technology to separate or itemize transactions or time spent every month gathering paperwork to request a refund for interchange. This requires time most small businesses don’t have and is prohibitively complex for retailers selling products with varying tax rates.
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Vendors selling online could decide that doing business in the state is not worth the hassle and expense of complying with this radical change to commerce.
