I’m a restaurant guy. I love the local place that makes their own pickles, brines their chicken in buttermilk, and drizzles hot honey on top of a perfectly crispy sandwich with a freshly baked brioche bun. You charge me a few bucks more for that? No problem. It’s worth it.
What’s not worth it? Legislating private business relationships because someone doesn’t like paying a card fee.
That’s exactly what’s happening with the latest wave of legislation targeting interchange fees, the small percentage merchants pay when customers use a credit card. The argument is that swipe fees are unfair, unpredictable, and charged even on tax and tip.
But, as a taxpayer advocate and someone who prefers to put down plastic when the check arrives, let me say: don’t blame the swipe.
So, what are interchange fees?
When you pay with a card, the business pays a 2–3% fee to process that transaction. That fee supports the system that keeps payments fast, secure, and fraud-protected. It’s not a tax. It’s not a government mandate. It’s a business-to-business exchange—a choice merchants make to serve their customers.
And restaurants make that choice every day, because accepting cards increases sales, tips, and customer satisfaction. If it didn’t, they’d stop.
But aren’t swipe fees hurting restaurants?
Let’s look at the five biggest claims:
1. “It’s like a private toll.”
That metaphor’s got spice, but it’s not accurate. Tolls are mandatory and set by the government. Accepting cards is completely optional. Businesses can:
Offer a cash discount
Set a card minimum
Choose cheaper processors
Go cash-only
Calling it a “toll” makes it sound like a public utility, but this is a voluntary service, and one that adds value for everyone involved.
2. “We get charged on sales tax and tips—money we don’t keep.”
Interchange fees apply to the total transaction because the processor secures and settles the full payment amount.
If the sales tax is too high, let’s cut it. To all legislators looking at this proposal, we’d love to work with you on that alternative.
And the last thing businesses should be pushing for are regulations making it harder and more expensive to tip—which only means fewer dollars in their workers’ pockets.
Remember: customers pay for convenience, too. I’ve eaten the $4 ATM fee just to get cash. Most people would rather swipe and earn points than dig for twenties. That’s convenience and a service these payment networks provide for both you and your customers, and it comes with a price.
3. “It’s one of our top five costs.”
Sure. So are ingredients, rent, and payroll. But we don’t cap the price of flour or require landlords to give rent breaks. Businesses weigh their costs and make decisions accordingly.
If card acceptance didn’t deliver value, merchants would drop it. But they don’t, because it works.
4. “We can’t negotiate or predict swipe fees.”
Most small businesses can. There’s a competitive market full of options—Square, Toast, Clover, local processors—all offering transparent pricing for the processing portion. Proposing these price controls and bans will only make it harder to negotiate the interchange portion.
Swipe fees aren’t unpredictable. They’re published, consistent by card type, and tied to clear factors. Just because you can’t negotiate like a Fortune 500 doesn’t mean you’re powerless.
5. “Regulation will boost competition and lower prices.”
That’s not how it works. Price controls don’t create competition. They distort it. Capping or dictating swipe fees punishes the very infrastructure that makes modern payments possible.
The real winners here? Giant chains and big-box retailers with lobbyists on speed dial. The losers? Smaller banks, credit unions, and ultimately the consumers who lose out on fraud protection and rewards.
What should lawmakers do instead?
If you want to help restaurants, do this:
Cut the sales tax on food
Simplify licensing
Avoid imposing regulations that limit access to capital
Let businesses expense equipment faster
Stay out of private business agreements
That’s real reform. Not micromanaging swipe fees because someone’s mad about a 2.5% charge on a customer’s $9 burger.
Bottom line?
I’ll gladly pay extra for the crispy chicken sandwich with hot honey. I’ll tip 20%. I’ll come back next weekend.
But I won’t support bad policy dressed up as restaurant relief. Swipe fees aren’t the enemy, and regulating them won’t solve what’s actually hurting small businesses.
Let’s fix what’s broken. And leave the chicken—and the swipe—alone.