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Featured Article filed under Independent Business | Written by Olivia LaVecchia | No Comments | Updated on Aug 14, 2017

Visa Wants to Rule How We Pay for Purchases. But Its Market Power Has a High Cost.

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/visa-wants-to-rule-how-we-pay-for-purchases-but-its-market-power-has-a-high-cost/

In July, Visa announced a new initiative. It would offer a select number of restaurants and food vendors as much as $10,000 each to upgrade their payment technology. There was one catch: The businesses had to agree to stop accepting cash.

The initiative was the “opening salvo,” as one Visa executive put it, in the credit card company’s plan to increase its market power by eliminating cash. “We’re focused on putting cash out of business,” Visa CEO Al Kelly told the company’s investors.

There’s a clear incentive for Visa to take on cash. That’s in part because the company has already conquered the market for credit cards. In 2016, 59 percent of credit and debit card purchases in the U.S. were made with a Visa card. Another 25 percent of purchases were made with a Mastercard, meaning that just two card networks now have a near lock on the market.

For the businesses on the receiving end of this push, though, a cashless future could be quite costly. That’s because of one of the other incentives Visa has for getting rid of cash. Every time a customer pays for a transaction with Visa, Visa gets a cut, along with the bank that issues the card, in what are known as swipe fees. Visa and the banks decide what that cut is. It averages about 2 percent [PDF] of the purchase amount. In other words, on a $100 purchase, that’s $2 that gets eaten up in swipe fees that would otherwise go to the business. Smaller businesses, which have no leverage to negotiate, often pay even more; in our survey of more than 3,000 independent business owners, retailers reported a median of 3 percent of their total revenue spent on swipe fees.

For many businesses, especially retailers and restaurants, swipe fees’ cut of their revenue is often more than their entire profit margin. As one business owner, the head of a fourth-generation supermarket in the Cleveland area, explains it, “Swipe fees have ballooned into my second-largest operating cost after labor… my profit margins don’t go much above a single percent.” Another business owner, who employs 400 people at eight gas station and convenience store locations in Minnesota, echoes the experience: “As with almost every other convenience store, the banks take more in swipe fees than I earn in profits.” Continue reading

Featured Article, ILSR Press Room filed under Energy, Energy Self-Reliant States | Written by Nick Stumo-Langer | No Comments | Updated on Aug 17, 2017

Press Release: Minneapolis Mayor’s Proposed Budget Unlocks $2M+ for Clean Energy

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/press-release-minneapolis-franchise-fee/

MINNEAPOLIS, MINN. — A few weeks ago, cities across the country responded to President Trump’s intention to withdraw from the Paris Climate Accord with their own commitments. But the City of Minneapolis, under a budget proposed by Mayor Betsy Hodges, is poised to do something novel: put real resources behind its climate and energy pledge. The mayor’s budget proposal would unlock more than $2 million in new funding, leverage more than $20 million in utility conservation funds and expand access to energy savings to many more residents and businesses Continue reading

Featured Article filed under Mid-Atlantic Recycling & Economic Development, Waste to Wealth | Written by Neil Seldman | No Comments | Updated on Aug 2, 2017

Brief History of Solid Waste Management and Recycling in Washington, DC

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/brief-history-of-solid-waste-management-and-recycling-in-washington-dc/

The history of solid waste and recycling in the District of Columbia is long and diverse. In the early years of the 20th Century low-income girls and women were hired to pick through garbage on sorting tables to recover materials. In the more recent past, recycling of newspapers and metals was a key fundraising tool… Continue reading

Featured Article, Resource filed under Broadband | Written by Nick Stumo-Langer | No Comments | Updated on Aug 10, 2017

Connecting Rural America: Internet Access for All – Episode 26 of the Building Local Power Podcast

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/connecting-rural-america-episode-26-of-the-building-local-power-podcast/

This week, our Building Local Power podcast contains a conversation between guest host Nick Stumo-Langer and ILSR researchers Hannah Trostle and Christopher Mitchell to discuss the importance of connectivity in rural America and the barriers high quality local investment. The group discusses a number of topics, including how electric cooperatives are changing the dynamic on… Continue reading

Featured Article filed under Energy, Energy Self-Reliant States | Written by Matthew Douglas-May | No Comments | Updated on Aug 2, 2017

Zero is the Hero: Zero Net Energy Buildings Reach New Communities, Promising Savings, and Renewable Energy

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/zero-is-the-hero/

As energy efficiency and renewable energy technologies continue to improve both functionally and economically, Zero Net Energy (ZNE) buildings are spreading in communities around the country. The energy savings and environmental benefits of ZNE buildings, which produce as much energy using on-site renewables as they consume, are catching the attention of city leaders, regulators, and… Continue reading