Changes in payment methods and transaction processing are altering the costs consumers face at checkout. Following the U.S. Mint’s discontinuation of penny production in November, numerous merchants have begun rounding cash transactions to the nearest nickel. Twenty states have already passed legislation addressing cash rounding practices, with a bipartisan federal measure called the Common Cents Act potentially standardizing the process nationwide, though differences between House and Senate versions remain unresolved.
Payment patterns have shifted significantly in recent years, with credit cards becoming the dominant transaction method. According to the Federal Reserve’s 2026 Diary of Consumer Payment Choice, consumers averaged 47 payments monthly in 2025, with credit cards accounting for 16 transactions compared to just six cash transactions. This represents a reversal from 2016, when cash was the most frequently used payment method with 14 transactions per month. Older, rural, and lower-income populations continue to rely more heavily on cash.
Simultaneously, an increasing number of merchants—particularly smaller retailers—are implementing credit card surcharges to offset processing expenses. Visa and Mastercard have permitted such surcharges since 2013. The cost of accepting credit cards has risen substantially, with the average interchange fee reaching 2.35 percent of purchase price in 2024, up from 2.02 percent in 2010. Swipe fees collectively exceeded $200 billion last year and represent the second-highest operating cost for most retailers after labor expenses.
A pending antitrust settlement stemming from a 2005 lawsuit by retailers against Visa and Mastercard would reduce swipe fees and allow merchants to reject certain high-fee credit cards. However, retail industry representatives have expressed concerns that the settlement’s benefits are inadequate and fail to address underlying competitive issues within the interchange system. Payment networks have defended their positions, with both Visa and Mastercard characterizing the settlement as providing meaningful relief and balanced outcomes.
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