Credit card swipe fees are brutal. There’s a fix in NC that’s fair for all. | Opinion

The North Carolina legislature is preparing to address the state’s most pressing needs — from the high cost of living to education to healthcare. While these issue areas deserve attention, one in particular is quietly having an outsized impact on Main Street.

Credit card interchange fees — better known as “swipe fees” — are a thorn in the side of small businesses across the state. By reining them in, lawmakers could help strengthen North Carolina’s economy and sharpen its competitive edge.

When a customer walks into my bookstore and purchases their favorite novel with a credit card, the card’s network and issuing bank take a two to four percent cut of the transaction. These “swipe fees” aren’t a government-mandated tax or routine operating expense — they’re simply a cover charge that merchants must pay for accepting credit cards in the first place.

While seemingly small, “swipe fees” are no drop in the bucket. It was found that Main Street businesses in North Carolina lose an eye-opening $283 million from these fees on sales tax alone. The situation has gotten so bad that many owners are forced to impose surcharges on credit cards. Others simply raise prices.

What does this mean for everyday consumers in the state? They pay an extra $1,200 each year thanks to price hikes associated with “swipe fees.”

The system is broken because a modern day credit card cartel runs the show. Visa and Mastercard handle roughly 80 percent of credit card transactions in the United States, giving them near-total control over the fees they charge. They enjoy profit margins north of 50 percent, while local shops in the state are lucky to earn anything close to that in total revenue, let alone profit.

It’s as if two major book distributors coordinated to squeeze every last penny from independent bookstores. And we all know that’s not how a healthy free-market economy is supposed to function.

Despite recent legal maneuvering from Visa and Mastercard suggesting that reforms are on the horizon, relief for small business owners remains far out of reach. That’s why North Carolina’s elected leaders must step up.

In Raleigh, lawmakers should pass a straightforward reform that prevents “swipe fees” from being collected on non-revenue-generating portions of transactions. Currently, major credit card networks apply these fees to the full checkout total — which more broadly includes taxes, tips, and other pass-through charges that never reach a business’s bottom line. Limiting “swipe fees” to the actual cost of the product or service being sold would reduce unnecessary costs for businesses and bring greater fairness to the payments system.

Such reforms aren’t the end all be all, but they give North Carolina a strong starting point to support local businesses and stay ahead of the curve. Federally, the state’s leaders on Capitol Hill can also make a meaningful difference.

A measure called the Credit Card Competition Act would lower “swipe fees” in all 50 states by requiring banks with over $100 billion in assets to include a second processing network beyond Visa and Mastercard on the credit cards they issue. This would give smaller networks a chance to compete by offering lower fees, compelling Visa and Mastercard to reduce their “swipe fees” in response.

It’s a win-win solution that allows Visa and Mastercard to continue operating while giving Main Street enterprises a break — it just needs a few more champions.

As 2026 takes shape, North Carolina lawmakers don’t need to reinvent the wheel to support the state’s economy. By advancing common-sense, pro-competition reforms in the payments sector, small business owners and consumers alike could keep more of what they earn — and strengthen the local communities that make North Carolina unique.

Dave Lucey is the owner of Page 158 Books in Wake Forest, North Carolina.

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