(Host) The state Senate has advanced a bill designed to protect merchants from excessive credit card fees.
Supporters say the bill would make Vermont the first in the nation to regulate the relationship between the card companies and retail businesses.
VPR’s John Dillon reports:
(Dillon) Every time you use plastic to buy something, the credit card company charges the store owner a transaction fee – typically around 2 percent.
The merchant has to pay the fee no matter how small the purchase. And the contracts between card companies and businesses prohibit the merchants from setting a minimum dollar amount for credit card sales.
The Senate bill changes that, and it gives the store owner more flexibility to offer discounts if lower-cost cards are used. Windsor Senator John Campbell is a lead sponsor of the legislation.
(Campbell) "So what this bill did, it’s giving a little bit back to the merchant and letting them set their own rules and regulations."
(Dillon) Campbell said the bill will help small businesses get some measure of control over what they pay to the credit card companies.
(Campbell) "I think what this reflects is a huge victory for small businesses against the Goliath Master Cards and Visas of the world and the American Expresses. For too long, these companies have been ruling how much money that our local merchants can make."
(Dillon) But one small business owner in the Senate was skeptical that the bill will do much at all. Grand Isle Senator Dick Mazza owns a country store that he says paid $17,000 in credit card fees last year.
Mazza said it’s risky for the state to be the first in the nation to regulate card company fees.
(Mazza) "I don’t think it’s needed at this time. I think there’s issues that could be resolved. I still worry about the tourists coming into the state if there is some rules and regulations in Vermont that we don’t have elsewhere…. I want to make it perfectly clear, this bill is not going to do anything to help small businesses."
(Dillon) Mazza was part of a bipartisan coalition that opposed the bill earlier in the week.
But the bill advanced on a unanimous vote after a controversial provision was removed.
The bill originally would have prohibited card companies from charging merchants more when a consumer used "rewards" cards, such as those that offer airline miles. Campbell says those cards may benefit consumers – but store owners end up paying extra.
The bill has the support of the Vermont Retail Association and the Vermont Grocers Association. It comes up for final approval later this week.
For VPR News, I’m John Dillon in Montpelier.