Small businesses across Missouri are hanging on by a thread. The financial impact of the coronavirus pandemic is far-reaching and will be felt in our state for years to come. Owning a small business even in normal times is tough, you wear several hats and are under constant pressure by your employees who count on your leadership and competency for their livelihood. Luckily, as a veteran, I know a little bit about pressure, and when I owned a small business, I found myself constantly drawing on my military experience and how I was taught to always expect the unexpected and plan for all scenarios.
In the military we’re taught to quickly adjust to a changing environment and that’s exactly what small businesses have done during this pandemic. In the span of just a few weeks, many businesses transitioned to delivery and curbside pickup as consumers were rightly concerned with eating at restaurants or shopping in-person. Others went entirely online overnight. Making customers feel comfortable and safe will be key to small business survival in the weeks and months ahead. One area where this is perhaps most evident is at the checkout counter.
Clerks wearing masks and plexiglass in front of the counter have become the norm and I’ve found myself and other consumers opting to use electronic payments instead of cash. Contactless payments technology in credit cards or apps like Apple Pay allow customers to checkout efficiently and without fear of handling cash or visiting an ATM and possibly coming into contact with the coronavirus.
However, contactless technology doesn’t come without a cost. Whenever you pay for a product with electronic payments, a fee is collected as part of the transaction. Merchants pay this to help support the entire system. They’re not the same as fixed costs, like rent, which are paid at the same rate every month regardless of how the business is doing or how many sales are made. Having served in the military and seeing firsthand the importance of efficient and secure technology, I’m more than happy to pay the small fees associated with processing card transactions to ensure my customers’ data is secure and my business is protected from potential fraud. Despite this, there have been recent efforts by big retailers to put caps on interchange fees for credit card purchases which would hurt small businesses in our community — this is after many big box stores remained open as “essential” while many small businesses had to close with all too many of them never reopening.
These caps would only serve to allow large corporate retailers to boost their margins enabling them to further squeeze small businesses. Is there any evidence that large retailer prices stay down after they have driven small businesses out of a town? In addition to the margin problem, the cost of these caps is simply going to result, one way or another, in greater costs for small businesses and consumers. My local bank is a business too, and like the rest of us, will try and recoup the lost income wherever it can. Innovations like contactless payments have allowed countless small businesses to remain above water and without them, would have led to unthinkable economic devastation. Elected officials must see these efforts for what they are, just the latest example of big business leveraging its power to hurt smaller competition. The government should stay out of dictating how small businesses operate and allow them to decide the kind of payments they accept.
The next several months are difficult to predict, but the coronavirus will not go away anytime soon. As long as we are in this new normal, small businesses need all the support they can get and that includes the technology to compete with big box stores and large retailers. Maintaining their access to high-tech payments software will be a key part to the future success of small business.