To the editor:
Credit cards have become an essential tool for many small businesses. As the owner of a construction company in Iowa, I use them on a daily basis. With the cost of raw materials rising year after year, we’ve relied on our business credit cards to pay for them, allowing us to earn rewards and keep costs down. Every purchase adds up, and being able to earn rewards helps us stretch budgets further.
These rewards also allow us to provide employee benefits that might otherwise be out of reach — whether it’s helping our project managers take a well-earned vacation or putting money back into the business for growth and stability. My business, Premier Construction, would not be where it is today without our savvy use of credit card rewards.
From experience, I also understand that running a small business, while extremely rewarding, is a challenging endeavor. Every decision we make has to keep the best interests of our employees and the livelihood of our business in mind. That’s why I’m concerned about the proposed Durbin-Marshall credit card bill, legislation that would force banks to open up credit cards on multiple payment networks.
Proponents of the Durbin-Marshall credit card bill argue that this change will create competition and drive down the cost of processing a transaction, known as the interchange fee. But the reality is that it will strip small businesses of the financial resources they need to thrive.
If the Durbin-Marshall bill becomes law, banks and credit unions will lose billions of dollars in revenue. This is the revenue that they use to fund the credit card rewards programs that we depend on to cover expenses. A study out of the University of Miami found that small businesses could lose $1 billion in rewards as a result of this proposal.
This loss would be yet another financial hit at a time when the cost of materials is already squeezing budgets. It would mean fewer opportunities for me to reward my employees for their hard work and less money to reinvest in the business.
This proposal would also jeopardize the security of the electronic payment system. When we swipe a business credit card to make purchases or order goods online, we do so with confidence that the process will be secure and efficient because card issuers invest billions into ensuring their networks are safe and protected against fraudulent actors.
Flooding the system with untested, alternative payment networks and slashing the revenue that funds robust security features would leave our financial information at risk of being compromised, a threat we can’t afford.
As small business owners across Iowa continue to work hard to overcome challenges and create jobs in their communities, we need our elected officials to stand with us, not against us. I’m asking Congress to oppose this misguided legislation, and I urge my fellow small business owners to do the same.
Adam Sieren
Des Moines
