The hidden tax on main street
Credit card swipe fees
are adding to the inflationary pain felt by small businesses and consumers alike—leading to a rise in cash payment requests.
Real Stories from Main Street: Swipe Fees Impact
“Swipe fees have cut deeply into our profits, forcing us to raise prices just to stay afloat. It’s a constant struggle to keep serving our community.”
Maria Lopez
Owner, Lopez Family Bakery
The Problem
Consumers are ultimate victims
More businesses now charge their customers fees when they pay using a credit card or offer discounts when they use cash. A WalletHub survey recently
found that 82% of consumers report paying these credit card surcharges in the last year.
Businesses not benefitting
Shop owners and restaurateurs are not trying to nickel-and-dime customers with these fees; they’re just trying to entice customers to use lower-cost forms of payment like cash or debit.
High cost for small businesses
Small businesses have to pay swipe fees when you use your credit card. Every time you swipe a card, 2–4% of the sale goes straight to big banks and card networks like Visa and Mastercard.
Problem increasing
Swipe fees totaled a record $198 billion last year. That’s more than $1,400 per household, up 80% since before the pandemic. Swipeflation is real.
Compounds inflation
This is on top of years of rising prices due to inflation. Rising costs for everything from labor to supplies to rent and utilities have squeezed the margins of small businesses because they have less capacity to absorb inflation than larger companies.
Swipe Fees Hurt Small Businesses
Thin margins destroyed
After years of inflation, many small businesses have seen their margins narrow. For many small businesses, like restaurants and retailers, swipe fees often equal or exceed their entire profit margin on a sale.
Tough choices
Small shops must either cut wages and hours or raise prices, making it harder to compete.
No leverage to negotiate
Unlike some big businesses, small businesses can't negotiate for lower rates with credit card companies.
Who Wins?
Credit card companies pocket a cut of every transaction, whether you’re a corner café or a Fortune 500 retailer.
Inflation is their windfall. Example: A meal at the local burger joint that cost $6 in 2019 now costs $8.40—an increase of 40%! Families pay more, and card companies get 40% more since they take a percentage of every sale, without doing anything extra.
Small Business Testimonials
"As a small promotional branding company, we're getting hit with swipe fees from every direction. Our own vendors have been tacking credit card fees onto the base goods we buy for a while, so our costs have been going up before a product even reaches our shop. Then we pay swipe fees again when our clients pay us; we’ve now been forced to ask them, in most cases, to help us with those fees (which can hurt our repeat business). Every year these fees climb, and every year we're forced into harder budgeting decisions — money that should go toward growing our business and serving our clients instead disappears into hidden processing costs. These fees are inflation, plain and simple."
— Max F., Little Pepper Promotions, Minneapolis, MN
"Every time a customer pays via credit card, I lose money in processing fees. One transaction may not seem like much, but over hundreds of jobs each season those fees add up to thousands of dollars. That' money I could use to buy equipment, grow my business, or create jobs in my community. Instead, it goes to the credit card companies and big banks that profit from every swipe and tap."
- Jason W., Nashville, TN
Paying with cash helps you support your favorite local small businesses by helping them keep their prices lower.
Swipe fees are a hidden tax that strangles Main Street and inflates prices for every household in America.
Partner Organizations
2-4% swipe fee rate charged on every credit card transaction
Swipe fees: the cost burden on small businesses and consumers.
Impact on Small Businesses
Small businesses pay billions annually in swipe fees, reducing profit margins and limiting growth opportunities.
Consumer Consequences
Consumers indirectly bear these fees through higher prices, with a record $198 billion passed on last year alone.
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