Commentary: Oregon Small Businesses Deserve a Break from Steep Credit Card Fees
A recent survey from Gov. Tina Kotek’s Prosperity Council indicates that many Oregonians believe high costs, taxes, and regulations hinder business growth. The governor has acknowledged these challenges, stating, “We have to be intentional here, to be competitive.”
One significant area for improvement is the high credit card processing fees that Oregon businesses incur with nearly every transaction.
Credit card interchange fees, or “swipe fees,” typically take 2 to 4 percent of each credit card purchase. For small businesses, this means paying fees for every cup of coffee or box of pastries sold. These fees accumulate quickly, contributing to the record $157 billion that U.S. businesses paid in swipe fees last year—$9 billion more than in 2024. With small businesses already grappling with rising costs in food, labor, insurance, and utilities, these processing fees become another burdensome expense they cannot negotiate.
Market dominance by Visa and Mastercard leaves little room for alternative payment options. This presents an opportunity for Oregon lawmakers to provide relief. One practical reform could involve prohibiting credit card companies from charging swipe fees on gratuities. Although Oregon businesses do not face processing fees on sales taxes, they still incur fees on tips intended for their employees. It is unjust for businesses to pay fees on funds they do not retain.
While the credit card industry argues that separating portions of transactions would be challenging, the payments system already differentiates transaction components for accounting. Implementing this change would require minimal adjustment, not a complete overhaul of the payment ecosystem.
Furthermore, Congress can tackle the competition issue within the credit card market. The bipartisan Credit Card Competition Act proposes that large card-issuing banks offer a second processing network beyond Visa or Mastercard. Increased competition would lead to reduced swipe fees, potentially saving consumers and businesses up to $17 billion every year.
Oregon Senators Ron Wyden and Jeff Merkley can support this federal initiative while state lawmakers pursue local reforms.
If Oregon is serious about enhancing its competitiveness and supporting small businesses, addressing excessive credit card swipe fees is a logical first step. Even small reforms could enable local businesses to keep more revenue, benefiting both the business and the community it serves.
Frank Squillo is the co-owner of Wanda’s Cafe + Bakery in Nehalem, Oregon. This article was originally published by Oregon Capital Chronicle and used with permission.
