Credit card change can hurt Tucson business


The following is the opinion and analysis of the writer:






Arianna Luna


Arizona’s tourist destinations attract visitors from across the United States and the world with its beautiful natural landscapes, theme parks, and unique museums. And it is thanks to our vibrant tourism economy that small businesses like mine are able to thrive. I am the proud owner of TUC Shop, a souvenir shop nestled in the heart of Tucson. Because the success of my business depends on Arizona’s tourists, I know how important it is to protect Arizona’s thriving tourism industry, which is supported by consumers using credit card rewards points.

When consumers use their credit cards for purchases, they are able to earn points that can be redeemed to buy flights and book hotels. According to Airlines for America, nearly 600,000 travelers used their rewards points to visit Arizona in 2022, generating an economic impact of more than $916 million. This is money spent dining in our restaurants, visiting our tourist attractions, and shopping in Arizona’s small businesses, including mine.

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Unfortunately, lawmakers in Washington are considering a bill that threatens our tourism economy and the success of small businesses that rely on it. Big box retailers are pushing Congress to pass the Credit Card Competition Act (CCCA), which would impose a “routing mandate” to cap interchange fees, which is the cost of processing a transaction. While the bill might sound like a good idea, it would actually have dire consequences for Arizona’s tourism industry and hurt Arizona consumers.

The CCCA would lower the revenue card issuers use to fund perks like cash back and travel rewards programs. This means they will have to make cuts to the rewards programs that hundreds of thousands of visitors rely on to travel to our state every single year. These cuts will directly hurt Arizona’s tourism economy and the small businesses, like mine, that rely on a thriving tourism industry. And this is not speculation; after the Australian Reserve Bank capped interchange fees on credit cards, the value of rewards points dropped by nearly 25%. I’m concerned that the CCCA would lead to similar outcomes here.

To make matters worse, Arizona consumers would not see any savings if this bill passes. When Congress passed similar legislation to cap debit interchange fees in 2010, large retailers were the only ones who saved money and did not pass those savings on to consumers in the form of lower prices. We have no reason to expect different outcomes this time around, and even the Congressional research service found that “It is not clear whether retailers would pass interchange savings on to consumers” as a result of this bill.

Like consumers, small businesses like mine are also not expected to see any savings from this bill. Big box retailers with the power and resources to negotiate lower interchange rates were the only ones who benefited from the Durbin Amendment and will be the ones to benefit from the CCCA. According to a University of Miami study, the five largest retailers in the nation are expected to save more than $1 billion, while real small businesses are expected to see little to no savings as a result of this bill.

As a small business owner, I appreciate the convenience of having customers simply tap or swipe their cards at the cash register. And my customers appreciate the speed and efficiency of electronic payments. But this system could become less safe if the CCCA becomes law by opening up credit cards to alternative, less secure payment networks. The use of these new networks could increase our incidences of fraudulent transactions, a risk we can’t afford to take.

If this bill becomes law, large retailers that have the negotiating power and resources to take advantage of routing mandates will be the biggest winners. For the sake of Arizona consumers and small businesses, I hope our lawmakers oppose this flawed and risky bill.

Follow these steps to easily submit a letter to the editor or guest opinion to the Arizona Daily Star.



Arianna Luna, a local small business owner and activist in Tucson.



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