Sounds Like a Market Niche

Some credit card companies, Visa and Mastercard come to mind, have been looking at raising the fees they charge merchants for using their cards. While the present Wuhan Virus situation has crimped those plans, the delay is only temporary and will last only as long as the virus problem and associated economic problem lasts. The fee increases, though, when they are implemented,

in some cases would be hardest on small businesses[.]

After all,

the abrupt global slowdown has been most acute for the smallest businesses, which tend to operate on thinner profit margins and smaller cash reserves.

Such a move by the major credit card players would seem to create a market niche. Maybe small businesses—perhaps by industry association, perhaps by geographic association, perhaps generally—could band together to create, issue, and support their own credit card(s). Bypassing the name cards and bypassing the banks that issue them also would allow the small business card issuers to charge a lower fee for use of the cards.

Which, ultimately, would be good for the businesses’ customers, and so for the businesses, a multi-win situation.  Small businesses in these new credit card associations would find their costs lowered—no longer having to pay the major card players such high fees—and so fewer costs to pass on to their customers or to eat, and so more customers entering their stores.

2 thoughts on “Sounds Like a Market Niche

    • Of course, cash always works. But the small business merchants, if they split the difference between cash and the fees the majors charge, would find their own group card an additional profit center while still lowering costs to their customers–and preserving for their customers the convenience of plastic.
      Eric Hines

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