Retailers claim credit card swipe fees are driving inflation

[melm00se]

21. Actually they do

The major challenge to businesses is a thing called cashflow.

I make widgets and the sales/delivery goes thusly:

I buy the components to build the widgets.
You buy the widgets from me.
You buy my installation and training services.
I install.
I bill you
You pay.

Now, let's put some time lines on this:

You order 10 widgets.
I order the components to build them (day 1)
The components ship (day 3 - the 30 day clock starts to pay my supplier)
Components arrive (day 5 - 28 days until the bill from my supplier comes due).
We build the widgets (+ 6 days or day 11. 22 days until my supplier comes due).
We pack them up and send them to you (+ 2 days or day 13. 19 days until my supplier comes due).
My installers arrive (+6 days, 13 days until my supplier comes due)
My installers finish the install 1 day per widget (+10 days or 3 days until my supplier comes due).
My people train your people (+3 days or the day my supplier comes due).
Job done.
Send you the bill (+1 day and the clock starts ticking on the terms between you and me but I am 1 day after the 30 days to my supplier)
You receive bill
You pay the bill (minimum of 30 days. My bill from my supplier is now 60 days out).

See a problem?
Now add in all the other costs that come in over the 60 days:
- Rent x 2
- utilities x 2
- salaries x 5 (every two weeks)
- insurances x 2
- equipment x2

How do I pay all of these bills when I won't get paid by you for 60(ish) days from the order?

There are plenty of ways small businesses manage cash flow and credit cards (both to accept and receive payments) are certainly one way to do it. Without some method of factoring, a lot of businesses would go TU so making blanket statements like "CC companies that contribute nothing to the economy" are made out of ignorance.