OPINIONOperations

Expect more action next year on reducing credit-card fees

Working Lunch: Shifting political alliances are likely to turn a reduction in charges into an imperative at the state level.

Restaurants may finally get traction next year in their longstanding effort to roll back the world’s highest credit-card processing fees, with the extra oompf coming in unexpected places from unlikely political allies, reports this week’s Working Lunch government-affairs podcast.

As co-hosts Joe Kefauver and Franklin Coley explain, the powerful banking lobby is losing support from its traditional Republican allies, who’ve blasted efforts to cap the charges as another instance of government interference into free-market dynamics. Public opinion of the financial institutions is not exactly at a high point, prompting once-diehard supporters to question an affiliation.

The banks “are finding themselves on tough footing right now in red jurisdictions,” said Franklin. “They’re increasingly finding themselves on less firm ground.”

Meanwhile, alliances of restaurants and retailers hoping to hammer down credit-card fees find themselves with a surprising new partner: labor unions like Service Employees International Union, or SEIU, and even the mighty International Brotherhood of Teamsters.

Add in the argument that restaurants in the U.S. spend more than double what their counterparts elsewhere pay to process credit card charges, and the scene is set for action, particularly at the state level. Even traditionally red states like Florida and Texas are taking up swipe-fee reform, noted Kefauver.   

“There are a lot of states that are looking to copycat what Florida’s doing and what Texas is doing, and address credit card fees again in 2024,” he added. “On the state level, I think we’ll be spending a lot more time than we ever have on this issue.”

Kefauver and Coley, partners in the Orlando, Fla.-based government affairs shop Align Public Strategies, also provide an update on what could be the next battle by the restaurant industry to preserve the tip credit. They chat with Steve Clark, CEO of the Massachusetts Restaurant Association, about a union effort in the Bay Street to phase out the employer concession.

Press “Play” for a full rundown of the government issues restaurants should be watching.

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