The U.S. payment landscape is undergoing significant changes following the cessation of penny production last year by the U.S. Mint. The last penny for circulation was issued in November, concluding 232 years of production. With approximately 300 billion pennies still in circulation, merchants are increasingly implementing rounding practices to accommodate cash transactions.
Twenty states have enacted laws permitting or requiring cash rounding, with additional states considering similar legislation. A bipartisan federal measure called the Common Cents Act has passed both the House and Senate, though differences between versions require resolution before final enactment. The proposed legislation would permit merchants to round totals to the nearest nickel when exact change cannot be provided, with specified rounding rules based on the final cent denomination.
Simultaneously, credit card surcharges are appearing more frequently at retailers, particularly among smaller merchants seeking to offset payment processing costs. Visa and Mastercard have permitted surcharges on credit card transactions since 2013. According to payment industry data, swipe fees averaged 2.35 percent of purchase prices in 2024, up from 2.02 percent in 2010, representing the second-highest operating expense for most retailers after labor costs.
These changes reflect broader shifts in consumer payment behavior. Data from the Federal Reserve’s 2026 Diary of Consumer Payment Choice shows consumers averaged 16 credit card payments monthly in 2025, compared with six cash transactions. This represents a reversal from 2016, when cash appeared in 14 monthly transactions versus eight for credit cards. Cash usage remains concentrated among older, rural, and low-income populations.
A pending settlement stemming from a 2005 antitrust lawsuit against Visa and Mastercard would reduce swipe fees and grant merchants greater flexibility in accepting payment types. However, retailers have expressed opposition to the settlement, contending that proposed benefits are insufficient and fail to address underlying structural issues within the payment interchange system.
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