Credit card processing fees are hurting smaller local businesses; why some stick with cash, check


CENTRAL ILLINOIS — A popular credit card processing company is increasing its costs.

Square Up, simply known as Square is now passing those costs down to businesses and non-profits. Square has changed its processing costs for all transactions. This really impacts small business owners who sell products like coffee, desserts, and even meals.

Ludy’s Kickapoo Creek Saloon has been open for 25 years and has only ever accepted cash or check. You can find the restaurant on Facebook here.

Owner Lynn Ludolph says she wants to continue serving reasonably priced meals, so if she brought the credit card processing in, prices would go up.

“If we add the cards we’re gonna have to add 5-10 percent on our costs for consumers. That’s a lot when you have a burger that’s five or six dollars,” Ludolph said.

Not only would it increase prices, but it would add on to expenses Ludy’s would have to pay.

“It’s not just the cost of the processing for us. It’s the cost that we’ll have to get a second phone line, or we’ll have to get an internet connection,” Ludolph said,

Ludy’s does have an ATM for those who only have a card and need to take out cash, but it charges a $3 fee.

While Ludolph has looked into getting a credit card processor, the cost could still hurt her business.

“The convenience of throwing that card up there, there’s a cost for somebody. Whether you knowingly pay that or whether it’s in your expense of the food you’ve eaten,” Ludolph said.

Credit card processing can be helpful for non-profits like the Salvation Army, where people who don’t carry cash can now donate online.

“Especially when you look for recurring gifts or monthly donors it’s a lot easier to do it online,” said Tri-County Development Director of the Salvation Army Rich Draeger.

But the downfall is there is a four percent charge for online donations using a credit card, which you can choose whether to cover.

This winter when the Salvation Army bell ringers are out, they hope to have card processing machines with them.

“One of the things we’d like to be able to do and the Army does do in some places is actually have swipe cards available at the kettle stands. Unfortunately, here in Central Illinois it’s usually too cold where we haven’t figured it out,” Draeger said.

Bloomberg recently released an article about Square’s price changes you can read here.

There’s a petition for Square to change its’ processing fees back to normal. You can find it here.

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