The restaurant industry is locked in a high-stakes fight against credit card swipe fees, the charges imposed by major financial institutions and credit card networks for processing transactions. These fees, typically 2% to 3.5% per transaction, have become one of the most significant restaurant expenses—sometimes even exceeding rent. With card transactions making up the vast majority of restaurant sales, particularly in a post-pandemic world where cash payments have declined sharply, these costs are a growing burden on an industry already facing rising labor costs, inflation, and supply chain disruptions.

The Growing Pressure to Regulate Swipe Fees

For years, restaurant owners and retail businesses have called for relief from excessive credit card processing fees, arguing that they operate without competition and transparency. Recent legal actions and legislative efforts signal a turning point in this fight.

1. The Department of Justice’s Antitrust Lawsuit Against Visa

In September 2024, the U.S. Department of Justice (DOJ) filed a civil antitrust lawsuit against Visa, alleging that the credit card giant engaged in monopolistic practices to maintain its dominance over the debit card market. The lawsuit argues that Visa has exclusionary agreements with merchants and banks, effectively blocking fair competition and keeping transaction fees high.

This legal action could have significant implications for restaurants and retailers, potentially leading to greater competition in payment processing, lower fees, and more business negotiating power.

“This lawsuit could be a game-changer for businesses struggling under the weight of excessive processing fees,” says industry analyst Mark Palmer. “It’s a direct challenge to Visa’s stronghold over the market.”

2. Legislative Push: The Fair Swipe Act of 2025

In Washington, D.C., lawmakers are introducing the Fair Swipe Act of 2025, a bill prohibiting credit card companies from charging processing fees on non-sale items like sales tax and gratuity. Currently, restaurants and retailers must pay swipe fees on the full transaction amount—including taxes and tips—which unfairly inflates costs.

If passed, this legislation would provide much-needed relief to businesses by ensuring that they only pay fees on actual sales revenue, not government-imposed taxes or optional gratuities.

3. Landmark $5.54 Billion Settlement with Visa & Mastercard

In March 2024, Visa and Mastercard reached a historic $5.54 billion settlement with merchants in response to a class-action lawsuit that accused them of anti-competitive practices and inflating swipe fees. This settlement—one of the largest in U.S. history—could result in an estimated $30 billion in business savings over the next five years.

While this marks a step forward, restaurant industry leaders argue that the fundamental issue of swipe fee structures remains unresolved.

“The settlement is a start, but unless we address the root problem—lack of competition and transparency—restaurants will continue to struggle under these costs,” said Sean Kennedy, Executive Vice President of Public Affairs for the National Restaurant Association.

The Restaurant Industry’s Swipe Fee Dilemma

Credit card fees have become an inescapable cost of doing business for restaurants. As consumer preferences have shifted toward digital and contactless payments, credit card transactions now account for 80% to 99% of total sales in many restaurants.

Here’s how swipe fees are impacting the industry:

• ‍Rising Operational Costs—Restaurants pay thousands (or even hundreds of thousands) of dollars annually in processing fees.‍
• Smaller Profit Margins—With already tight margins, swipe fees directly reduce profits, making it harder for independent restaurants to survive.‍
• Added Customer Surcharges – Some restaurants have introduced credit card surcharges (typically 3% to 4%) to offset costs, though this can deter customers.‍
• Limited Payment Options—While some businesses offer discounts for cash payments, most customers prefer the convenience of credit cards.

“We’re stuck in a system where we have no choice but to accept cards, yet we have zero control over the fees we’re charged,” said one restaurant owner. “It’s an invisible tax on small businesses.”

What’s Next? Will Restaurants See Relief?

With legal and legislative efforts gaining momentum, the credit card fee battle is far from over. The industry is pushing for greater transparency, competition, and fairer fee structures, but credit card companies aren’t backing down. Visa, Mastercard, and major banks argue that these fees are necessary to maintain security, fraud protection, and payment infrastructure—a claim many restaurant owners dispute.

The National Restaurant Association and other advocacy groups continue to fight for reform, urging Congress to pass legislation introducing more competition into the payment processing industry. The outcome of these battles could reshape how restaurants handle transactions and determine whether they can sustain long-term profitability in an increasingly cashless world.

How You Can Stay Informed & Take Action

Advocate for change – Support industry groups lobbying for fairer payment processing regulations.

Stay updated – Follow legislative developments, as new laws could impact your business. Consider alternative payment strategies – Explore lower-fee processors, cash discount programs, or surcharge options.

For an in-depth discussion on this ongoing fight, listen to the latest episode of the “Working Lunch” podcast. Industry experts discuss the battle over swipe fees and what it means for the future of the restaurant business.

This battle is about more than fees—it’s about fairness, competition, and the future of an industry that feeds America. Will restaurants finally get relief, or will the financial squeeze continue? Stay tuned.

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