Card swipe fees: what you're really paying and how owners cut them
U.S. merchants paid a record $198 billion in card fees in 2025. The line item most owners never read, and what the new Visa and Mastercard settlement could change.
For most small businesses, card processing is the biggest bill after payroll that nobody reads. U.S. merchants paid $198.25 billion in credit and debit card fees in 2025, up 5.9% from $187.2 billion in 2024, according to the Nilson Report. The average fee on a Visa or Mastercard credit card was 2.36% of the sale, up from 2.02% in 2010.
Where the money goes
Every card sale carries three layers of cost:
- Interchange, set by Visa and Mastercard and paid to the bank that issued the card. This is the biggest piece. It’s higher for rewards cards: on Visa’s April 2026 schedule, a card-present restaurant sale on a standard rewards card is 2.10%, and 2.60% on Visa Infinite and Signature Preferred cards.
- Network fees, paid to the card brand.
- Processor markup, which is the only part you can negotiate.
Small tickets hurt most. Square’s published in-person rate is 2.4% to 2.6% plus 15 cents. A coffee shop doing $30,000 a month in card sales at a $15 average ticket runs about 2,000 transactions. At 2.6% plus 15 cents, that’s roughly $1,080 a month, or 3.6% of card sales, because the 15 cents is a big share of a $15 sale.
What the settlement could change
In June 2026 a federal judge in New York granted preliminary approval to a revised settlement between Visa, Mastercard and more than 12 million merchants, according to Rhode Island Lawyers Weekly. Under it, the networks would cut swipe fees by 0.1 percentage point for five years and cap standard consumer card rates at 1.25% for eight years. Merchants could also choose which categories of cards to accept, including the option to decline premium rewards cards, and would get more room to add surcharges. The National Retail Federation and other groups oppose the deal and plan to object, so final terms are not settled.
For the coffee shop above, a 0.1-point cut is worth about $30 a month. The bigger change would be the right to turn away premium cards or surcharge them.
How owners cut fees today
- Read one statement line by line. Divide total fees by total card sales. If your effective rate is well above 3% and your average ticket isn’t small, get competing quotes.
- Ask for interchange-plus pricing. You see the real interchange cost plus a fixed markup, which is easier to compare than a flat or tiered rate.
- Keep cards present. Keyed-in sales cost more. On Visa’s schedule, keying a debit card moves it from 1.19% plus 10 cents to 1.65% plus 15 cents.
- Check your state before surcharging. Surcharges are banned by statute in Connecticut, Maine, Massachusetts and Puerto Rico, and capped in states including Colorado and Oklahoma (2%) and Minnesota (5%). A cash discount is often the safer option.
- Push recurring customers to bank transfer (ACH). For service businesses billing the same clients monthly, invoicing through tools like QuickBooks or Jobber with a bank-payment option usually costs far less than card.
This article is general information, not financial or legal advice.
Sources: Merchants Payments Coalition, citing the Nilson Report, Mar. 18, 2026 · Rhode Island Lawyers Weekly, settlement approval, June 11, 2026 · Federal Reserve Bank of Kansas City, interchange fees update, Aug. 2026 · Celer Merchants 2026 card fee report