The Post-Penny Economy Explained
· marketing
The Post-Penny Economy: How Cash Rounding and Credit Card Surcharges Are Changing What You Pay
The end of penny production in November marked a turning point in our economy’s subtle but significant shift towards cashless transactions. States have begun to pass laws governing cash rounding, while Congress weighs in with its own legislation. This has left consumers facing an increasingly convoluted landscape at checkout counters.
Cash use has been on the decline for years, and credit card transactions have taken up the slack. According to the 2026 Diary of Consumer Payment Choice, the average American made 47 monthly payments in 2025 – with a staggering 16 using a credit card, compared to just six paid with cash. This trend is no surprise: cash tends to be used by older populations, rural areas, and low-income households.
Cash rounding has sparked debate about fairness and transparency. Some states have taken a more permissive approach, while others are moving towards stricter guidelines. The proposed Common Cents Act would allow merchants to round totals up or down to the nearest nickel – but only if exact change can’t be provided. This bill aims to bring clarity to the cash rounding debate, but its impact remains uncertain.
Cash rounding is merely one symptom of a larger issue: the rise in credit card surcharges at retailers and service providers. These extra fees, often tacked on as a percentage of the transaction total, are designed to offset merchants’ costs associated with processing debit and credit cards. Swipe fees – those amounts merchants pay when customers use a debit or credit card – have increased significantly over the past decade.
The National Retail Federation estimates that swipe fees totaled nearly $200 billion last year. For most retailers, these fees are second only to labor costs as their biggest operating expense. In response, some small merchants have started adding surcharges for credit card transactions – a move facilitated by Visa and Mastercard’s 2013 policy allowing them to do so.
While surcharges may offer merchants short-term relief from swipe fees, they ultimately reflect a deeper problem: the lack of competition in the payment processing industry. This means retailers have little bargaining power when it comes to negotiating with credit card companies. Many are opposing the pending antitrust settlement related to the 2005 lawsuit against Visa and Mastercard.
The benefits promised by this settlement – reduced swipe fees, more flexibility for merchants to reject certain credit cards – sound appealing at first glance. However, experts argue that they fall short of addressing the core issue: a payment processing system plagued by lack of competition.
As we adjust to this new economics of change, consumers need to understand what’s happening behind the scenes. The vanishing penny may be a tangible symbol of our shift towards cashless transactions – but it’s merely one piece in a much larger puzzle. As states and Congress weigh in on cash rounding, merchants implement surcharges, and credit card companies collect their fees, we’re left with more questions than answers.
The Common Cents Act, the antitrust settlement, and the rise of credit card surcharges all point to a fundamental issue: our payment processing system is broken. Consumers are caught in the crossfire of a complex and ever-changing financial landscape. It’s time for policymakers and industry leaders to take a closer look at the root causes of this problem and work towards creating a more equitable and transparent system.
Reader Views
- ABAriana B. · marketing consultant
The rise of cashless transactions and credit card surcharges has finally forced lawmakers to take notice. But what's being overlooked is how these changes will impact small businesses, particularly those in underserved communities where cash is still king. While larger retailers may be able to absorb swipe fees, smaller mom-and-pop shops could be priced out of the market altogether, further eroding local economic diversity and vitality. It's a trade-off we should be having – not just about fairness or transparency, but about who benefits from this new economic landscape.
- TSThe Stage Desk · editorial
"The Common Cents Act may attempt to bring order to cash rounding, but what about merchants who choose not to implement exact change policies? They're essentially exempt from accountability. And while credit card surcharges are the hot topic now, we should remember that these fees disproportionately affect low-income households and small businesses, who often rely on cash transactions. The real impact of this shift will be felt when the most vulnerable segments of our economy can no longer afford to use cash at all."
- MDMateo D. · small-business owner
The proposed Common Cents Act is just a Band-Aid solution for the underlying issue of cash rounding. What's being overlooked is the cumulative effect these practices have on small businesses like mine, which often operate on thin profit margins. When we're forced to implement cash rounding and absorb credit card surcharges, it adds up – literally. It's not just about fairness or transparency; it's about making ends meet in a market where every penny counts.