Although credit cards come with a lot of benefits for customers—points, cash back, and exclusive discounts—small businesses don't quite benefit as much from swiping plastic. According to the Merchants Payments Coalition, an organization aimed at payment reform in the U.S., retailers across the country now bear an annual burden of roughly $160 billion in swipe fees —charges imposed on merchants for processing card payments. Swipe fees are typically around 2% and go to the bank that issued the card. These fees generally encompass a percentage of the customer's purchase plus a flat fee per transaction. For many small businesses, the fees can really add up. Jennifer Luna, who owns a local gift shop in Seattle, said in 2022, she paid $75,000 in swipe fees while paying herself $40,000. Aside from rent and employee compensation, Luna says swipe fees are her third-largest expense. While some big-name companies can negotiate deals to minimize swipe fees, such as Costco.