SBE Council Report on Credit Cards and Small Business

The report walks through a brief history of the credit card industry; explains the basics of how credit card transactions work; offers the economic basics of the industry; and examines key policy proposals and their consequences.

Also presented is "The Top 10 Benefits for Small Businesses from the Use of Credit/Debit Cards." While fully explained in the report, that top 10 list is: 1) What's good for consumers is good for small business, 2) Helping to finance small businesses, 3) Increased sales for small businesses, 4) Guaranteed payments for small businesses, 5) Weathering economic storms, 6) Eliminate major costs that would otherwise fall on small businesses, 7) Enhance efficiency and cost savings for small businesses, 8) Improved security for small businesses, 9) Exports, international growth, and opportunities for entrepreneurs, and 10) Rewards and innovations benefit small businesses.

Karen Kerrigan, president and CEO of SBE Council, said: "Given all of the benefits small businesses and consumers receive from the credit-debit card industry, we should all be concerned about an economic climate featuring a credit crunch, and a policy climate leading to more regulation and restrictions that would only make matters far worse."

Raymond J. Keating, SBE Council chief economist and author of the report, observed: "There are groups leading the charge to effectively impose price controls on the credit/debit card industry through either the courts or Congress. As this report makes clear, such actions would only raise costs and reduce benefits for consumers and small businesses."

Keating concluded: "Fundamental economics and a proper understanding of the credit card industry reveal that the arguments, court cases, and legislation being peddled by those looking to impose government price controls on the credit card industry make no sense, and will have negative effects on consumers, merchants, and the businesses and employees within the industry."