Cactus Flower Florists is an Arizona success story.
Through over five decades in the Valley, our family-owned-and-operated small business has outlasted multiple recessions, a pandemic and plenty of brick-and-mortar and online competitors.
The key is adapting with the times. One of the biggest changes we’ve witnessed has been the overwhelming transition away from cash and to electronic payments, either credit or debit cards. They’re quick, secure and simple.
Now, a handful of big-box mega-retailers are asking state lawmakers to turn Arizona’s trusted system of electronic payments upside down. The move threatens to create an additional costly burden for small businesses like mine. I’ll explain.
Every purchase made with a credit or debit card is supported by an invisible but essential system ensuring a seamless, secure link between customers, merchants and financial institutions — namely, banks, credit unions and credit card companies. Transactions are processed within seconds via a global network that provides customer service and technological safeguards against fraud and theft. That protects consumers and businesses.
With each electronic transaction, merchants pay on average about 2% for the processing service. This rate has remained flat for a decade, despite rising costs in practically every other aspect of my business. Unfortunately, state legislation now being considered — House Bill 2629 — would carve out a portion of my customers’ transaction, upending the system and replacing it with … well, nobody knows because it has never been done before.
Over 30 states have considered legislation similar to HB 2629, but only Illinois took the leap last year. The result? Lawsuits, costly technology and software upgrades for small businesses, and plenty of uncertainty. The bulk of that law remains tied up in the courts as merchants wait in limbo.
No, thanks.
HB 2629 is pushed by the big-box retailers because they stand to benefit the most. Plus, they have whole teams of IT, tax and other specialists to help them navigate a wholesale change in how electronic payments are processed. Little guys like me … not so much.
It’s estimated a typical Arizona small business may save between $50 to 75 per month with this legislation, but incur potentially hundreds of dollars in software and technological expenses to accurately process electronic payments currently done automatically. Even worse, HB 2629 may force retailers to require two transactions for every purchase — one for the good or service and a second for the tax.
Multiply that by hundreds of transactions in a given week and you can imagine what a hassle that would be for me and my customers.
Arizona is home to over 600,000 small businesses, like Cactus Flower Florists. We’re happy to accept cash or check, but the reality is the vast majority of our customers prefer the convenience and security of a credit or debit card.
HB 2629 asks us to fundamentally change an electronic-payment system that works and that Arizona merchants and consumers rely upon. “Trust us,” advocates say. “We’ll figure it out.”
No. I urge legislators not to gamble with small businesses and our primary method of getting paid. Reject HB 2629.
Editor’s note: Eric Luoma is the owner of Cactus Flower Florists, based in Scottsdale and with locations in Chandler and Carefree. Please send your comments to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.
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