The landscape of consumer payments is shifting as merchants adapt to the elimination of penny production and respond to rising payment processing expenses. The U.S. Mint issued its final penny in November, marking the end of the coin’s 232-year production run. With approximately 300 billion pennies still in circulation, many retailers have begun implementing rounding practices for cash transactions, typically to the nearest nickel.
To address this change, lawmakers have proposed the Common Cents Act, a bipartisan measure that would establish federal guidance allowing merchants to round cash totals up or down to the nearest nickel when exact change cannot be provided. The rounding method outlined in the bill follows a specific pattern: totals ending in 1, 2, 6, or 7 cents would round down, while those ending in 3, 4, 8, or 9 cents would round up. The measure has already passed both chambers of Congress but requires reconciliation of differences between House and Senate versions before final enactment. Meanwhile, twenty states have already enacted rounding legislation, with others evaluating similar policies.
Concurrently, credit card surcharges are becoming increasingly prevalent at smaller retailers and service providers. Visa and Mastercard have permitted merchants to impose surcharges on credit card transactions since 2013, but adoption has accelerated recently. Industry experts attribute this trend to elevated payment processing fees, known as swipe fees, which averaged 2.35 percent of purchase prices in 2024, up from 2.02 percent in 2010.
Data from consumer payment studies show a significant shift in payment methods over the past decade. In 2025, credit card payments constituted the most frequent transaction type at 16 of the average 47 monthly payments per consumer, compared to just six cash transactions. This reversal reflects a broader decline in cash usage, which remains more prevalent among older, rural, and lower-income populations.
A pending antitrust settlement involving retailers, Visa, and Mastercard from litigation filed in 2005 aims to reduce swipe fees and grant merchants greater flexibility in accepting payment types. However, retail representatives have expressed reservations about the settlement’s adequacy, arguing that proposed relief measures do not sufficiently address the underlying competitive issues within the payment processing industry.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI