This is a quote from one of my favorite movies, Groundhog Day starring Bill Murray. It's a classic that never fails to deliver a few chuckles. The story is about a man who must re-live Groundhog Day, over and over, until he learns to get things right. In some ways, the movie is similar to your credit card processing costs; they, too, have a certain “déjà vu - all over again” quality about them.
Over the past couple of years, you may have seen a leveling-off or even a slight decrease of your credit card merchant fees. Why? Consumers were “deleveraging” and using less credit during the Great Recession. Now, consumers are starting to feel better about the economy and are embracing credit cards again. The irony is that this plays into the hands of banks that are encouraging consumers to use more credit and less debit in order to offset the negative impact of the Durbin Amendment.
For the first time in nearly a decade, credit card usage is growing faster than debit card usage. Any savings expected from new debit interchange rates will likely be consumed by the growth in use of credit cards and a corresponding decline in the use of debit cards. This trend is NOT your friend.
Payment processing costs are going up. There are some things you can do to help: add convenience fees to your credit card transactions, consider limiting your exposure with minimum and maximum amounts for credit card payments, implement a debit-only strategy, or offer students a discount for cash (and cash-like) payments. Take action today, and like Bill Murray's character in Groundhog Day, avoid waking up tomorrow to the “same old song.”