Payment methods at the retail register are shifting as cash usage declines and credit card transactions become increasingly prevalent. The U.S. Mint ceased penny production in November, after the coins had circulated for 232 years. This development has prompted 20 states to pass laws permitting or requiring merchants to round cash totals to the nearest nickel, with additional states considering similar legislation.
Federal guidance on rounding practices may soon arrive through the Common Cents Act, a bipartisan bill that has cleared both the House and Senate. The legislation would allow—though not require—merchants to round transactions up or down to the nearest nickel when exact change cannot be provided. The proposed rounding structure would round down for totals ending in 1, 2, 6, or 7 cents and round up for those ending in 3, 4, 8, or 9 cents. Reconciling differences between the House and Senate versions remains necessary before the measure can be finalized.
Meanwhile, credit card surcharges are appearing more frequently at retail locations. Since 2013, Visa and Mastercard have permitted merchants to add surcharges for credit card transactions, though not debit cards. Small merchants increasingly are implementing these surcharges to offset elevated payment processing costs. The average swipe fee—the percentage merchants pay for card transactions—reached 2.35% of purchase price in 2024, up from 2.02% in 2010, according to industry data.
The shift reflects broader changes in consumer payment patterns. According to the Federal Reserve’s most recent payment diary study, consumers averaged 16 credit card transactions monthly compared to six cash transactions. This represents a notable reversal from 2016, when cash was the most frequently used payment method. An antitrust settlement involving Visa and Mastercard could reduce swipe fees and provide merchants greater flexibility in accepting specific card types, though retailers have expressed concerns about the adequacy of proposed relief measures.
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