Op-Ed | Protecting the electronic payments system for small business

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Tammeca Rochester, owner of Harlem Cycle.
Photo Credit: Tiana Robles

With the holiday shopping season upon us, it’s important to recognize the locally owned, small businesses that are the backbone of our economy. My cycling studio, Harlem Cycle, thrives on the energy and enthusiasm of our diverse clientele in the heart of Harlem. As a business rooted in the community, we cherish the trust our clients have for us and we take pride in representing everything that makes Harlem unique.

Our business has grown, in part, by our ability to evolve and grow in a changing business landscape. With the rise of clients using electronic payments, we can now take advantage of seamless payment options, including credit cards and e-commerce. This ease of payment has helped our clients stay committed to their workout plan while simultaneously helping us grow the business. However, the proposed Credit Card Competition Act (CCCA) has me and other small business owners concerned. 

The CCCA, as it stands, claims to promote competition in credit card networks. Proponents of the bill suggest that offering merchants a choice between networks for processing transactions will reduce fees and help small businesses. In theory, this may seem beneficial, but in reality for small businesses like mine, this will not be the case.  

Recently, I traveled to our nation’s capital to meet with New York’s federal delegation and express my deep concerns about the CCCA. Contrary to its title, if the CCCA became law, businesses like mine would not see meaningful savings or competition, if any, and we could face new risks in processing payments. While mega retailers might find opportunities to negotiate directly with payment networks to save on interchange fees, small businesses do not have this same power. Many of us use fintech companies to handle our payment processing, meaning we can’t directly choose the payment networks to use, regardless of any changes the CCCA would make. Those companies may see savings, but they have no incentive to pass those down to us.

One of the most troubling unintended consequences of the CCCA is the impact it will have on payment security and fraud protection for my business. My cycling studio relies on credit cards for everything, from booking sessions for customers to in-studio purchases. My customers often show up to class with nothing but their phone and keys in hand, which is possible because of seamless electronic payment options. And if a charge is ever disputed or flagged as fraudulent, my bank resolves the issue immediately without impacting my bottom line.  

Unfortunately, unfamiliar alternative payment networks empowered by the CCCA may lack the robust security features that we rely on for fraud and data breach protection, and this new influx of them into the marketplace will negatively impact the whole credit card processing industry. It would reduce the valuable revenue used to cover fraud losses and fund security measures, and disincentivize investments in these services in the future for all networks. For small businesses like mine, it only takes one payment that doesn’t clear to lose a customer’s trust and support. My customers trust me to keep their credit card information on file – the last thing I want to do is violate that trust with networks that do not have security measures that are up to standard.

As a business owner who values the safety and convenience that credit cards offer my customers, not to mention the stability they provide for my business, I urge lawmakers to seriously consider the potential ramifications of the CCCA. This bill poses more threats than benefits for small businesses nationwide. The focus should be on protecting our communities, ensuring access to credit, and maintaining the security and trust our customers rely on.

Congress should recognize the importance of small businesses and oppose the CCCA. I hope the New York delegation will work to safeguard the foundation of our small business ecosystem and shut down this bill.

Tammeca Rochester is the owner and founder of Harlem Cycle.