As Credit Card Use Grows, So Do Fees Charged by Businesses

By:
Chris Gaetano
Published Date:
Aug 19, 2021
iStock-910061460 Credit Cards Score Debt Payment

While still a minority, the number of businesses that charge fees for credit and debit card users or offer discounts to cash users has grown, the Wall Street Journal reported.

Data from payments consultancy the Strawhecker Group indicates that, at this point, 5 percent of businesses that accept credit and debit cards charge customers more than those who pay by cash, a small number that nonetheless represents a more than doubling of the rate from five years ago, 2 percent. Meanwhile, data from CardX LLC, a fintech group marketed to small businesses, indicates that the number of merchants using its surcharge-calculating software has nearly tripled since 2019, going from 2,308  to about 6,400 now. 

While cash has been gradually diminishing as the preferred payment option, the pandemic accelerated that process, leading many businesses to observe higher numbers of customers paying by card, whether online or in person. The Federal Reserve confirmed that consumers turned more to cards than cash over the course of the pandemic, with the most recent data showing that credit card balances have grown by $17 billion in just one quarter.

If more people are using cards, then this must mean a subsequent growth in the fees charged to process those transactions. The Journal noted that this motivated the many businesses to begin charging fees when they hadn't before, especially when their margins are measured in pennies. 

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