Credit Card Swipe Fees Are Eating Your Profits — And Congress Might Actually Fix It
Contributed by SBOC Member:
Pat Miller
Founder of the Small Business Owners Community
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The Hidden Tax on Every Transaction
Every time a customer swipes a credit card at your business, you lose 2 to 4 percent of that transaction. Not to taxes. Not to overhead. To Visa and MasterCard.
You don’t get to negotiate the rate. You don’t get to shop around. Two companies control the credit card network, and they set the fees. Take it or leave it.
Last year, those swipe fees totaled $187 billion nationwide. For a small business billing $200,000 a year, that’s $4,000 to $8,000 gone — just for the privilege of accepting credit card payments.
For a restaurant operating on single-digit margins, that 3% can be the difference between staying open and closing down. It’s why some of the best restaurants in your city are cash only.
The Credit Card Competition Act
There’s a bipartisan bill moving through Congress called the Credit Card Competition Act, and it could change the game for small business owners.
The concept is straightforward: banks would be required to let merchants choose from more than just Visa and MasterCard for processing transactions. Additional networks — think Stripe, Square, and others — would get access to the system.
More competition means lower prices. That’s not ideology — it’s basic economics.
The bill has support from both parties, which is notable in a Congress where bipartisan agreement is increasingly rare. Both sides recognize that small businesses are getting squeezed by a system they have no control over.
What This Means for Your Business
If the bill passes, the immediate impact would be lower processing fees as networks compete for merchant business. Even a 1% reduction on a $200K business puts $2,000 back into your operating budget.
That money could go to:
- Hiring part-time help
- Marketing and advertising
- Technology upgrades
- Your own paycheck
Three percent to a Fortune 500 company is a rounding error. Three percent to a solopreneur is a meaningful difference.
What You Can Do Now
What You Can Do Now
While we wait for Congress:
- Know your numbers. Pull your processing statements and calculate your total annual swipe fees. Most business owners have no idea how much they’re paying.
- Explore ACH payments. Bank-to-bank transfers (ACH) bypass credit card networks entirely, saving you the processing fee. Many invoicing platforms now support ACH.
- Consider cash discounts. Some businesses offer a small discount for cash or ACH payments. It’s legal, transparent, and incentivizes cheaper payment methods.
- Keep an eye on the bill. If the Credit Card Competition Act passes, new options will emerge quickly. Be ready to switch.
This is one of those rare issues where Congress might actually help small business. Don’t hold your breath — but don’t ignore it either.
Stop Chasing. Start Building.
The most successful small business owners aren’t the ones who adopt every new tool first. They’re the ones who get the fundamentals so right that the tools almost don’t matter.
Use AI. Adopt new tools. Stay current. But invest your real energy into what’s not going to change.
Trust. Results. Connection.
Those are forever.
From Businessing with Pat Miller — a daily live show for small business owners. Mon–Thu at 11am CT. Join the conversation at smallbusinesscommunity.com.
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Contributed by
Pat Miller
Founder of the Small Business Owners Community
Pat spent two decades in broadcasting management and hosting. After leaving the radio industry, he spent time consulting small businesses and realized the support system for entrepreneurs was broken. Where could you find help for improving small businesses and building real connections with other like-minded people. In June of 2020, the Idea Collective Small Business Community was born.