If you’ve ever run payroll at midnight or filled out a permit form in your car before a city inspection, then you know what it feels like to run a business these days. For me, it’s like running a three-legged race through a minefield, blindfolded, while bureaucrats yell “surprise!” and toss grenades labeled “new regulation,” “hidden fee,” and “compliance deadline.”
Every week brings a new curveball. Last month, a sudden hike in license renewal fees and an equipment upgrade, because, apparently, it’s no longer up to code. Finally, let’s not forget the endless tax forms no one warns you about. You finally think you can take a weekend off, and then boom: some well-meaning lawmaker decides to “help” small businesses by meddling with something he doesn’t understand.
When a politician promises a “simple fix” for small businesses, I brace for impact because it usually means some suit in a committee room thinks she’s cracked the code on running my business without ever having run a cash register.
Regulating credit card fees is just the latest thing politicians think is helpful. And it’s not just happening in one state, it’s a growing trend. Some states are already debating swipe fee bans, and now Congress is getting in on the action too. Senators Durbin and Marshall are pushing their so-called “Credit Card Competition Act,” which sounds great until you realize it’s Washington’s version of the same bad idea.
There’s a new push across the country to cap or outright ban interchange fees on certain parts of a transaction, like sales tax and tips. It’s being sold as pro-small business, a way to stick it to the big banks and save us all a little money. I’ve been down this road. I run small businesses in the real world, not a think tank. The truth is this is not the win they say it is.
First, let’s talk basics: When someone pays with a card, there are two key players involved:
Your payment processor—Square, Stripe, Clover—handles the tech and the customer-facing tools.
The payment network—Visa, Mastercard, Discover, etc.—charges an interchange fee, which goes to the bank that issued your customer’s card. That fee isn’t a corporate scam; it funds fraud protection, ensures fast payments, and mitigates the risk of accepting credit.
If lawmakers start dictating that certain parts of a purchase, like tax or gratuity, can’t be included in that fee, they’re not eliminating the cost. They’re just rearranging the puzzle and dumping the new burden on us. And guess who’s going to pay for it? You. Me. Our customers. Everyone but the megacorporations who lobbied for it.
Fact: when payroll is run, I’m not just paying my staff—I’m paying for the privilege to pay staff. I’m paying taxes on the wages I pay my staff. Employer-side payroll taxes that most employees don’t even know exist. It’s like tipping the government for letting me hire someone. And every time there’s a new fee or mandate that increases costs I have to make the same decision: do I eat it, or raise prices?
Spoiler: I usually raise prices. Because I have to. And I hate it.
Now here’s the twist: Swipe fee caps don’t just mess with us as business owners. They mess with us as consumers, too. When card rewards disappear, when checkout gets slower, when small businesses start adding confusing surcharges to survive, guess what? We’re the ones standing in line, grumbling about it.
So why are we doing this to each other? Why are we asking lawmakers to kneecap the very system that lets us get paid securely and gives our customers the convenience they expect?
This isn’t about sticking it to Wall Street. It’s about giving a regulatory gift basket to massive national retailers who already negotiated better rates than we’ll ever see. And it’ll come at the expense of small businesses like ours, and the community banks and credit unions we rely on.
Will massive global financial institutions or mega retailers lose sleep over this? No, not Visa or Amazon. Your local bank, the one that knew your name when you were just starting out, or helped float you a loan to keep your doors open during COVID, they’ll feel it. Interchange fees help fund small business lending and keep the wheels turning in towns across the country. Whether you run a coffee shop in Arizona or a salon in Texas, these policies hit the same: more compliance, less clarity, and even tighter margins. This isn’t a red state or blue state issue, it’s a Main Street issue being driven from both statehouses and Capitol Hill.
Small business owners don’t need more mandates, we need better margins, less government, and not more red tape. We need room to breathe.
So from one spreadsheet-weary, tax-paying entrepreneur to another—who’s stayed up too late balancing invoices and skipped vacations to make payroll—I say, don’t fall for this. Push back. Ask questions. And remind your lawmakers that “pro-small business” should mean helping us thrive, not burying us under the weight of another short-sighted fix.