American business owners have long chafed at the high cost of accepting credit cards. Complaints over these so-called “swipe fees” have only grown louder since the pandemic.
Credit card purchase volumes jumped 51 per cent between 2015 and 2021, figures from the Federal Reserve show. Transaction values were up 60 per cent over the period.
Many companies’ profits margins are narrowing as they get squeezed by higher inflation. That has prompted a growing number of businesses to attempt to pass higher costs on to their customers. They are adding a surcharge or a convenience fee on those who want to swipe their plastic.
Payment consultancy TSG reckons between 5-10 per cent of 8mn card-accepting small businesses in the US now charge fees for credit card usage. That is up from 2 per cent five years ago. Underscoring the growing trend, TSG said about 15 per cent of new merchants who accept card payments have a surcharge policy.
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