California has been ranked the priciest state for new businesses, highlighting the urgency for lawmakers to implement measures that alleviate costs for entrepreneurs. Assemblymember Liz Ortega's bill AB 1065 aims to stop credit card companies from charging interchange fees on sales taxes and tips, promising to save California's small businesses over a billion dollars. Currently, swipe fees, which can be between 2% and 4%, burden businesses and consumers alike, contributing to an average annual cost of $1,200 per family due to these hidden fees. Visa and Mastercard's dominance exacerbates the problem, fueling a need for reform.
For that reason, it's crucial lawmakers seize opportunities that would lower costs and make it easier for entrepreneurs in the state to get off the ground.
Swipe fees were initially introduced to offset the cost of processing a credit card transaction. But decades later, while technology has continued to advance and transaction costs have decreased, these fees continued to climb.
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