Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
The conversation about paid parental leave continues, and President Trump added his 2 cents during the State of Union Address. Small Business optimism took a dip last month, but remains sunny overall, and Visa announces big changes to its fee structuring.
President backs tax credit advance in lieu of paid parental leave
President Trump used his State of the Union address to lend his support to The Advancing Support for Working Families Act, a piece of legislation that would give working parents access to a tax credit instead of actual paid family leave. The bill has bipartisan support, though critics argue that it does not actually guarantee time off or protect working parents’ jobs if they do need to be away from work for an extended amount of time.
The Number: $5,000. The proposed legislation, co-sponsored by Senators Sinema and Cassidy, would allow parents to receive an advance of up to $5,000
The Quote: “By utilizing the child tax credit and making it optional, families can choose to utilize the dollars to which they are entitled anyway, just using them sooner in their child’s lifetime.”
SBO optimism weakens but remains strong overall
A Gallup poll of small business owners found that SBO optimism has weakened but remains strong overall. The Small Index is down 10 points, from 142 during the last quarter of 2019, to 132 presently. The report found “the latest decline is fueled mainly by owners’ reports of a lower hiring rate and a decreased anticipation of hiring more employees in 2020.” Other measures of financial health are stable and “quite positive” even.
The Number: 69%. The survey noted some new trends among SBOs, including the emerging importance of online reviews, with 69% reporting that these reviews are “extremely or very important” to their businesses.
The Quote: “Owners continue to be most likely to cite attracting customers and new business as the top challenge facing their businesses.”
Visa announces big changes to payment processing, SMBs impacted
Visa, the world’s largest credit card network, announced that they are restructuring their “swipe fees.” This update will start in April and continue through October, and the changes in rates will depend on the category of business. For instance, fees will increase for online businesses and go down for certain service and education industries. These rate changes are considered more significant than usual rate adjustments and will impact both merchants and consumers.
The Number: $6.5 trillion. Together, Visa and Mastercard facilitate $6.5 trillion in card payments each year.
The Quote: “Interchange fees can be a double-edged sword, costing businesses worldwide billions of dollars each year. These fees are the reason why customers often end up paying higher prices for goods and services, regardless of whether they pay with cash or credit.”