House to discuss card requirements for businesses

The House of Representatives will be tackling legislation that seeks to require all businesses to accept debit and credit cards as a medium of transactions in the Commonwealth.

The House will be discussing Rep. Luis “L.J.” John Castro’s (R-Saipan) House Bill 21-75, or the bill that seeks to mandate all businesses to accept at least two modes of transactions, one of which must be through debit or credit cards.

This comes soon after the House adopted the committee report 21-45 on H.B. 21-75 issued by the House Committee on Commerce and Tourism, led by chair Rep. Joseph “Lee Pan” Guerrero (R-Saipan) and in the wake of some House members started bringing up concerns at the House session last Oct. 31, 2019.

Rep. Tina Sablan (Ind-Saipan) pointed out that while the legislation reached out to some businesses, she noted that comments were only solicited from banks on the island and a large business that already offers debit and credit card transactions.

“I appreciate the work of the committee, but I would be concerned on adopting this committee report without seeking comments from the businesses that would be most impacted,” she stated during the report’s discussion, adding that small businesses would be the most affected.

Although the legislation exempts businesses with an annual gross revenue of $25,000 or less, Rep. Edwin K. Propst (Ind-Saipan) pointed out that not all businesses can afford to pay the merchant fee associated with terminal services for credit and debit cards.

“…We are looking at small businesses who will struggle with paying the merchant fee,” he said.

Propst further noted that his office noted a call from a small business owner who feels that his constitutional right as a business owner to have an option of accepting payment, regardless of the form, for services rendered or merchandise parted with, will be violated.

“We know that large businesses…have no problem with absorbing merchant fees…but the small businesses that open for the Sabalu Market, the fishermen, and those who sell things on the side are really the ones who are going to struggle,” he said.

Both Sablan and Propst recommended that the legislation go back to the committee for further review.

Castro noted that the legislation is more than just about requiring businesses to accept card transactions.

“The legislation clarifies the importance of allowing debit and credit cards to be used for purchases,” he said.

According to the legislation, offering card transactions also assists with recordkeeping on the government’s side, specifically by providing a more accurate record of sales.