Story Series: featured
Law to Reduce Debit Card Fees to Retailers Has Opposite Effect
December 12, 2011We’ve had many negative things to say about the debit card reform law that went into effect a few months ago (AKA the Durbin Amendment). We’ve repeatedly made claims that retailers won’t participate in the savings but for the few that do, those savings won’t be passed on to the consumer.
According to a recent article in the Wall Street Journal, something much worse is happening; Debit card fees are going up!
“Jason Scherr had a lot on his mind the day after he opened his fifth Think Coffee shop in Manhattan last week. The fan was blowing too hard, the classical music was playing a little too loudly—and he was trying to figure out how to get more customers to pay with cash.
Manhattan coffee-shop owner Jason Scherr says his debit-card fees are higher since the Dodd-Frank law.
A new law that was supposed to reduce costs for merchants that accept debit cards has instead sent Mr. Scherr’s monthly processing bills much higher and forced him to reassess the way he does business.
“My choice is to raise prices, discount for cash or get an ATM,” says Mr. Scherr, a lawyer who has been in the coffee-shop business for more than a decade.
Just two months after one of the most controversial parts of the Dodd-Frank financial-overhaul law was enacted, some merchants and consumers are starting to pay the price.
Many business owners who sell low-priced goods like coffee and candy bars now are paying higher rates—not lower—when their customers use debit cards for transactions that are less than roughly $10.
That is because credit-card companies used to give merchants discounts on debit-card fees they pay on small transactions. But the Dodd-Frank Act placed an overall cap on the fees, and the banking industry has responded by eliminating the discounts.
“There will be some unhappy parties, as there always is when the government gets in the way of the free-market system,” says Chris McWilton, president of U.S. markets forMasterCard Inc. He said the company decided that it couldn’t sustain the discounts under the new rate model because the old rates had essentially subsidized the small-ticket discounts.
Merchants now are trying to offset their higher rates by raising prices, encouraging customers to pay in cash or dropping card payments altogether.”
Read the full article at WSJ.com
The Occupy Wall Street Million Dollar Question
November 2, 2011I pose this question to you Occupiers of Wall Street:
You’re angry, tired, and sick of the rich Wall Street fat cats. Their overly generous compensation packages are evil. and not just plain old evil, but rather,
EVIL!
at least that’s how the word looks on your cardboard sign in red marker. Getting ahead is hard and you want everyone to know it.
But then… a weird stroke of luck happens… Your cousin just got hired by Goldman Sachs and they’ve asked him if he knows anyone else looking for a job. Your cousin mentions your name and they want to set up an interview. The starting salary is $300,000 a year.
Do you go to the interview?
or would that be…
EVIL?!
New to the Merchant Cash Advance Industry? Read first!
November 2, 2011Thinking about starting a career in the Merchant Cash Advance industry or becoming a funding source? We’ve compiled some tips from the people already on the inside. Comments were gathered and organized from an insider discussion board at MCAForums.com
5 THINGS YOU NEED TO KNOW
1. You will apparently need a pair of these:
2. You will need training from those with experience. You can’t get into this market without being familiar with its complexities. Having financial experience, mortgage experience, etc. will help but is not enough to make it without additional training.
– WHAT WAS SAID: “until you learn how each company operates and understand the products, this market is way too competitive to not have support.“
3. The market is extremely competitive.
4. Partner up with companies that fit your needs and capabilities.
– WHAT WAS SAID: “You’ll have to find the MCA companies that fit your ethics. They’re all different, good, bad, fast, slow, flexible, inflexible, etc.“
5. Offer alternative products. A Merchant Cash Advance is not the right fit for every business. You will need to provide or refer alternatives such as SBA Loans or Micro Loans if the situation warrants it.
Don’t Make Us Pay is Back at it Again
October 21, 2011After months of silence, we received a mass e-mail yesterday from the infamous dontmakeuspay.org:
Tell Your Congressman: Repeal the Durbin Amendment!
Take Action!
You know all too well the harm that the Durbin amendment on debit cards has caused to debit card users like you. Across America, we’re seeing higher fees, the end of free checking and disappearing rewards – without a penny of savings at the cash register.
Fortunately, some members of Congress are standing up for consumers. They’ve introduced legislation that would repeal this harmful amendment and reverse the harm it’s causing for debit card users.
This legislation won’t pass without your help. Click the link to send a letter to your representative, and ask them to co-sponsor this important legislation. And don’t forget to spread the word about this important effort.
Let’s join together and make our voices heard: repeal the Durbin amendment. Don’t make us pay.
