Early last year, Visa scrapped its musty 20-year-old slogan
“Everywhere you want to be” and launched a new “Life Takes Visa”
advertising campaign. The new ads would be fresh, touching,
humorous — they would capture those “little universal truth
moments” that warm our hearts and hopefully put us in a spending
mood.
This summer, in a commercial known as “Lawn & Garden,” a
bright and cheery day at the Willy Wonka greenhouse unfolds. Buyers
whirl by like dancers in a Busby Berkeley number, colorful
merchandise flies off the shelves, and hoses sprout skyward like
fountain jets. As grinning customers cheerfully chug through the
check-out line, a shaggy-haired employee swipes their credit cards,
and they sail on out without missing a beat. But when a middle-aged
woman puts a few items on the counter and opens her purse, the
music grinds to a stop. All goes cold, all becomes dark, as she
makes out a check. The check-out man frowns. The camera
lingers on a mournful stone garden cherub, head in hands at this
unforgivable gaffe. (Although I submit that the main problem lies
with the woman filling out her check before the employee has rung a
single thing up. Look close.)
Swing around to another commercial’s scene: “Morning in
Manhattan.” As Gotham begins to stir, her citizens flood down
sidewalks and course out of subway maws, credit cards in hand as
they search for their morning sustenance. They’re shown swiping
their way to breakfast at small magazine stands, tiny tea shops,
and finally at the local “Donut Hub.” In the retro store, with all
of TWO PEOPLE behind him, a man fumbles to pull out enough change
to cover his coffee. The action again freezes in horror, and the
cashier gives him a shaming look that melts into tolerance. She’ll
let this one pass. But the message is clear: The Hub wants the
card, bucko. Using anything other than the fastest possible payment
method will clearly blast the created order to bits, or bring the
workings of a major metropolis to a halt.
While the choreographed commercials are a catchy way to
introduce the efficiency of new Blink card technology — a
contact-free credit card interface — it is ironic that Visa
chooses in its commercials to showcase all the plastic action in
small businesses, for tiny purchases. These local scenes, all
aprons and coziness, stir up the warm fuzzies Visa’s ad team is
seeking, but the vignettes belie the fact that many small merchants
probably prefer customers refrain from using credit cards for
incidentals. Mastercard, Visa, American Express: they charge
merchants fees for statements, equipment rental, Internet
processing, applications, customer support, and per item
“interchange” fees.
Interchange fees in America average 2 or 3% of a given
purchase’s value but vary, depending on the merchant and the type
of card. That doesn’t seem like much, but it is twice the rate
charged in the United Kingdom and four times Australia. Some
companies claim to have been driven out of business by the rising
costs of offering customers a speedy payment.
It’s not that credit cards are necessarily bad for small
businesses. Obviously the expediency of a credit card (not to
mention the deferred consequences) encourages people to buy goods
that they otherwise would not, and this is a plus for the old
economy.
But interchange fees have doubled in the last ten years, and the
dollars rack up quickly, which accounts for the occasional “minimum
credit card” purchase amount at your local gift store or Chinese
restaurant. With the possible exception of a Donut Hub waitress,
you won’t get a frown from a mom and pop shop for paying with a few
dollar bills, but you may if you pull out a credit card.
Try it the next time you pick up a creme soda at your favorite
local enterprise: ask which form of payment management prefers.
It’s an easy answer: cash or check, especially on items where the
profit margin is a few pennies on the dollar. Recently, the
strapped state of Michigan has forbidden credit card payments in
its Secretary of State offices. They couldn’t justify payment of
thousands in kickback charges. The only card allowed is Discover,
which lets state employees ask customers to add a “convenience
charge” to their bills in exchange for the card usage.
Small business owners can impart two pearls of wisdom: If
something is everywhere you want to be, then it is probably not
free. And don’t believe everything you see on television.
