Small businesses are the lifeblood of Hawaii’s economy, providing employment for nearly half of the state’s population. But these businesses are facing an unfair burden in the form of skyrocketing swipe fees, which have more than doubled over the past decade. Accounting for the second-highest overhead cost for most businesses just behind labor, these fees are an enormous strain for small businesses with narrow profit margins.

Unfortunately, the system is currently rigged in favor of Visa and Mastercard. While banks issue Visa and Mastercard credit cards, the fee rates are not determined by the banks themselves. Rather, the major credit card companies set these rates. While banks can compete on other fees, such as interest rates, the lack of competition in setting swipe fees allows Visa and Mastercard to establish a schedule of constantly increasing fees, which many banks implement in exchange for their card services and a share of the fees.

This means that every time a consumer swipes their credit card at a local establishment, small businesses are left with a massive bill. Often, the only option to keep their doors open is to pass these fees on to consumers through higher prices, creating a vicious cycle that only benefits the credit card giants.

This is particularly concerning at a time when businesses and consumers are already facing astronomically high prices due to inflation. Adding to the already high cost of living in the state is bad for businesses and their customers.

The time has come to demand a fairer system for small businesses and consumers. That’s why we must stand together and demand that Congress pass the Credit Card Competition Act in 2023. This crucial legislation will require the largest banks in the nation to provide a second network option to handle processing transactions on their credit cards.

By breaking the stranglehold of these behemoth credit card companies, we can finally force them to compete and therefore consider the preferences of small businesses and consumers, who are struggling to make ends meet.

Small businesses are a driving force for the economic success of our communities, and they have suffered enough over the past few years — from the pandemic to supply chain shortages to 40-year high inflation. As our economy rebounds post-pandemic, small businesses can benefit — as long as rising swipe fees don’t continue to dig into their profit and make it harder to keep their doors open.

We are counting on Hawaii’s U.S. Sens. Mazie Hirono and Brian Schatz to stand up for our businesses and support the passage of the Credit Card Competition Act. Let’s ensure that small businesses can continue to thrive and provide valuable employment opportunities for our local communities.

Lauren Zirbel is president of the Hawaii Food Industry Association; Tina Yamaki is president of the Retail Merchants of Hawaii; Julie Plant chairs the Retail Merchants of Hawaii.