Swiping your Credit Card may Soon be More Costly - Hawaii News Now - KGMB and KHNL

Swiping your Credit Card may Soon be More Costly

Honolulu (HawaiiNewsNow) – You may have to think twice before you swipe. Major changes could be coming that might have consumers reaching for cash instead of credit cards.

The approval of a deal that could hit consumers in the wallet may be right around the corner. This past week, Visa, MasterCard and other banks agreed to a $7.3 billion settlement in a price-fixing case. The agreement now gives businesses the right to charge more for using plastic, to offset "swipe fees."

With every swipe on a credit card purchase, retailers are charged a fee.

"It goes anywhere from 2-3 percent, that's the range were in," said Bryson Dang who's the Co-owner of "The Wedding Café" and "Eden in Love."

Businesses have to pay the surcharge to process credit card transactions. After a recent settlement, the "swipe fee" could be passed on to consumers starting next year.

"As a consumer of course were not happy about it, things are expensive as it is to live in Hawaii and another 2-3 percent to use a credit card is going to put a burden on us." said Francis Kung.

"It seems like every time you turn around there's a new cost and yet the sales and the general income for sales and small businesses is not keeping pace with the increase in these fees," said State Senator Sam Slom.

Slom says this is just another burden that local small businesses will have to deal with.

"Most businesses to the extent that they can, will try to absorb those additional fees," said Slom. "Now at some point, the fees in combination are so high that if they try to pass them along, they'll get consumer resistance, that's when you see businesses going out of business."       

Bryson Dang is the co-owner of two stores in Ward Warehouse and tells us that 80-90 percent of his businesses sales come from credit card purchases. Even though they may be able to pass the swipe fee along, customers there won't have to worry.

"We're not looking to implement those changes immediately because we value the relationships with our customers and we've already built it in to our model," said Dang. 

If other merchants decide to go in the opposite direction and pass those fees on, shoppers will still have the choice to pay with cash, or a debit card, which does not carry a surcharge.

A federal judge still needs to review the settlement before approving it and that could take several months.         

Ten states have laws prohibiting merchants from passing the fees along, but Hawaii isn't one of them.

Powered by Frankly