Coffee Chat with Eric #18: Payments War on Consumers

June 6, 2025) We’re in the middle of a Payments War…and the consumer is losing.

This week, I dive into the chaos erupting at checkout counters across America, where 34% of merchants (per J.D. Power 2025) are passing along the 3% credit card swipe fee directly to customers.

That means many of us face an uncomfortable, no-win choice when we shop.

Three choices, in fact:

1. Use your favorite credit card…and eat the 3% fee.

2. Pull out cash or debit…as if it’s 1980.

3. Walk away…and find a business that won’t penalize your payment preference

Grab your coffee — in the first minute, we’ll talk about those no-win choices, and for my fellow payment optimists, stick around for the second minute - I offer two solutions for merchants to consider, e.g., alt pay options like Cash App and others. This week's episode was inspired by a new sign I saw on the door of a favorite local shop — larger than their logo — warning of the credit card surcharge.

It left me wondering: Is this the new normal?

Yes. It is.

P.S. I genuinely sympathize with local merchants — interchange fees are one of the few non-negotiable costs of doing business, set by card networks with zero room for negotiation. That’s why so many are watching the proposed Credit Card Competition Act, which could introduce much-needed competition and fee relief (which could come with changes to our favorite rewards programs - gross). Until smart, regulatory reform occurs, simply passing those swipe fees on to customers isn’t a sustainable solution. It erodes loyalty, frustrates regulars, and makes the merchant's front door feel more like a toll booth. There are smarter, more customer-friendly ways to ease the pressure.