Georgia House committee exploring the impact of credit card fees

(The Center Square) — A Georgia House study committee is looking into the impact credit card fees have on Georgia merchants and consumers.

The House Study Committee on Credit Card Fees on State Sales and Excise Tax and Their Impact on Georgia Merchants and Consumers, created by House Resolution 1135 , comes as consumers increasingly pay with credit cards. The committee will also explore whether merchant discount fees should be imposed on the state tax portion of a transaction.

"Over the course of the past 20 years, [there] has been a significant shift away from both cash and checks and towards using card payments," Julian Morris, senior scholar with the International Center for Law and Economics, told committee members.’

In addition to interchange fees for card-based transactions, Georgia merchants must collect and remit state and local sales and excise taxes. Merchants keep part of the money — known as vendor compensation — to help defray the cost of collecting taxes.

"I think the free flow of capital is a good thing, and anything that we can do to help Georgians be able to transact capital and merchants to be able to accept money is absolutely a good thing," state Rep. Todd Jones, R-South Forsyth, said during the meeting. "But the question has to start to become inside of the value chain, if any part of that value chain starts to have more power than the other parts of the value chain, do you have to question that value chain?"

Because of the costs of processing credit cards, some merchants, such as gas stations, charge consumers more to pay with plastic than cash. In March, personal finance site WalletHub released its 2024 Credit Card Processing Fees Survey , which found roughly 85% of people think they are being "nickel-and-dimed" when asked to pay a fee to cover the cost of credit card processing.

Bill Sheedy, a senior advisor for Visa, told committee members that "all forms of payment have costs, and all forms of payment have different benefits to consumers and to merchants."

"Other forms of payment, like cash and — and it’s a shrinking number, but still significant — people writing checks, these have costs associated with them," Sheedy told the committee. "They have friction associated with them. They provide different levels of value to both consumers and the merchants in the broader payment system.

"...As we think about the costs associated with interchange and the electronic payment system, I’d also try to remind us that … by reducing friction and improving the efficiency and the flow of the economy, which is primarily driven by consumers and merchants coming together, the interchange model creates a very efficient [and] very effective payment system, and it’s been there for decades," Sheedy added.