BUFFALO, N.Y. — You may see some decreased credit card swipe fees, following Visa and Mastercard settling an antitrust suit… but will your bank account actually feel any of those changes?
For 32 years, Niagara Café has been a staple restaurant in Buffalo.
For the last 12 of those years, they’ve asked one favor of their in-person customers, please pay in cash.
“Sometimes [customers] do get upset about it, but it’s something they’ve gotten used to,” restaurant manager, Lillian Quintana said.
Quintana’s family made the decision to stop accepting cards at their restaurant, because the fees from credit card companies can just be too much.
“They charge a fee per transaction, and they also take a percentage.”
Both Bankrate.com senior industry analyst Ted Rossman and president/CEO, of the New York State Restaurant Association Melissa Fleischut agree these costs add up.
“Basically, every time a consumer pays with a credit card, the merchant has to pay the card fees an average of about 2.2%,” Rossman said.
“For some restaurants, this is the third-highest fee they’re paying, after labor and food costs,” Fleischut said.
There’s hope those credit card fees could be on the decline.
Tuesday, a $30-billion legal settlement between Visa & Mastercard and U.S. merchants was announced, but Rossman tells 7 News not to get your hopes up.
“That interchange fee reduction that Visa and Mastercard agreed to is just 0.04% over the next three years,” Rossman said.
That means that for any $10,000 made by a local business, Rossman’s 2.2% average card swipe fee would cost them $220.
Dropping that percentage 0.04% changes that fee total very minimally, to just $216, saving a business just $4 for every $10,000 in sales.
“I wouldn’t expect to see any price changes right away,” Fleischut said.
“I don’t think this really makes much of a difference either way,” Rossman said. “I think the merchants that are more likely to win from any kind of reform are the really big ones, the Amazons, Targets and Walmarts of the world.”
Quintana tells 7 News that with a big enough swipe fee decrease maybe they’d bring the card payment option back, but this change isn’t quite what they’re looking for.
“Actually, that’s something we would discuss, but as of now no,” Quintana said.
This settlement still requires court approval before any changes take place.
