Credit Card Stranglehold

Next time you go out shopping, look at the front door, or near the credit card machine and see what types of credit cards the store takes. There is about a 99% chance that the company takes Visa and/or Mastercard. And there is a bill that will hit the Senate floor that will attempt to overhaul the credit card world. One of the things that store owners hope will be in the bill is the ability to negotiate fees with credit cards. Because when you use a credit card, the store must pay a fee. Small per transaction, sure, but overall, it cost companies $48 billion last year. A hefty sum indeed. Some people argue that Visa and Mastercard operate a dual monopoly (is that a contradiction?). Because if you do not take Visa and/or Mastercard, you will likely lose business. Most stores also take American Express or Discover card, but nearly all stores take V & MC. Card issuers claim that there is no monopoly and that new payment methods such as Paypal enter the market everyday, increasing competetion. But let's be honest, store owners are slow and reluctant to change, especially when new payment methods are not likely to have a strong, vocal backing. The solution: pass the bill in the Senate that allows store owners to renegotiate with credit card companies the fees that are levied against the stores.