SPRINGFIELD, Ill. (WAND) — Many people love supporting small businesses throughout Central Illinois. You may buy local whenever possible, but you may not realize that small business owners are losing roughly 4% or more of each transaction due to swipe fees.

"When we made $100,000 in the shop in gross sales, $5,000 of that already went to the credit card companies," said Gordon Davis, co-founder of Whimsy Tea Company in Springfield.

Visa and Mastercard are set to raise the fees they charge retailers each time you swipe a credit card. However, Sen. Dick Durbin is determined to protect business owners and customers by passing a plan to make the credit card industry competitive.

Davis told reporters Monday that creating competition and lowering the swipe fees could help him save enough money to buy an oven or upgrade his water heating system.

"Rather than us having a choice so that we have the option to save that money and spend it to grow the business, credit card companies want us to have no choice," Davis added. 

Durbin said Visa and Mastercard charged merchants $93 billion in 2022 alone.

"About 93% of the actual revenues that we do are through credit cards because people today are trained through habit since COVID to use their credit cards," said Karen Conn, CEO of Conn's Hospitality Group. "It's contactless."

Conn said the current payment model will not be sustainable unless Congress addresses swipe fees and figures out a solution to give business owners a choice. Durbin's legislation could require the country's largest banks to allow at least one network that isn't Visa or Mastercard.

"My colleagues, God bless them, are nervous about it because they have the banking industry, airline industry and others saying you can't do this and it would ruin us," Durbin said. "Yet, they have retailers of every stripe, large and small, saying 'if this continues it's going to ruin us.'"

Thousands of retailers and small businesses are supporting the idea because they believe processing costs are also hurting customers by driving up the cost of business.

"Running a small business is not easy," noted Pamela Frazier, CEO of All in One Laundry Center & Services. "Every penny counts, and high credit card swipes only make it more difficult for ends to meet." 

Visa, Mastercard, Discover and Capitol One argue that Durbin's plan could hurt customers by diminishing popular credit card rewards programs and lessening fraud protection. 

"Our economy thrives when competition is robust, and the credit card market should be no exception," Durbin said. 

The Illinois Retail Merchants Association supported Durbin's effort to increase transparency and accountability in the debit card system in 2010. IRMA President and CEO Rob Karr told reporters he is extraordinarily proud to stand with Durbin to see this plan cross the finish line as well.

"Retailers compete every day," Karr said. "We're used to competition, but we also know the benefits it brings in terms of accountability and transparency. It's time to do that for the credit card sector payment networks."

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