Oregon Push to Curb Swipe Fees Hits National Cost Debate

What happened

A cafe co-owner from the small coastal town of Nehalem has become the latest voice in a long-running fight over what businesses pay every time a customer taps a credit card. Frank Squillo, who runs Wanda's Cafe + Bakery, wrote a commentary distributed by the Oregon Capital Chronicle arguing that Oregon lawmakers and the state's congressional delegation should act to lower the swipe fees merchants pay on nearly every transaction 19. His central ask is narrow but concrete: stop card networks from charging processing fees on the portion of a transaction that is a tip, since that money never belongs to the business in the first place 9. His broader ask is that Oregon's senators, Ron Wyden and Jeff Merkley, back the federal Credit Card Competition Act, which would force the largest card-issuing banks to route transactions over a second network beyond Visa or Mastercard 920.

The commentary lands in the middle of a much larger conversation about whether Oregon is losing ground to neighboring states on cost and competitiveness. Governor Tina Kotek's Prosperity Council surveyed more than 1,000 Oregonians earlier in the year and found broad agreement that high costs, taxes, regulations and permitting delays are holding back business growth 1011. Rural respondents pointed to workforce shortages and infrastructure gaps, while Portland-area respondents emphasized housing costs and regulatory complexity 1011. Kotek said the state has "to be intentional here, to be competitive," and the council later issued formal recommendations in June calling for tax cuts, a 20% reduction in regulations, and a new commerce authority to replace Business Oregon 12.

The math behind the complaint

Interchange, or "swipe," fees typically run 2% to 4% of a credit-card sale, according to Squillo's account, while a Congressional Research Service breakdown describes the total merchant discount rate — which bundles interchange with network assessments and processor markups — as more commonly landing around 1% to 3% 1913. Those percentages scale into enormous sums nationally. Squillo cites $157 billion paid by U.S. businesses in credit-card swipe fees in 2025, up $9 billion from the prior year 9. A separate industry account, drawing on Nilson Report data, puts total credit- and debit-card swipe fees at $198.25 billion for 2025, with credit-card fees across all networks at $157.8 billion and Visa/Mastercard credit fees specifically at $118.8 billion 14. The average Visa/Mastercard rate rose to 2.36% of each transaction, continuing a climb from 2.02% in 2010 14. The Congressional Research Service's own historical figure, roughly $160 billion in 2022 swipe fees, sits comfortably within that same upward trend 13.

For a business like Wanda's Cafe, the fee lands on every latte, pastry and, notably, every tip left on a card. Squillo's argument is that while Oregon businesses at least don't pay processing fees on sales tax, they do pay them on gratuities that go straight to employees rather than the business 9. He frames excluding tips from fee calculations as a modest operational tweak, not a rebuild of the payments system, since transaction components are already itemized for accounting purposes 9.

Why small operators feel it more

Restaurant-industry materials note that many restaurants operate on pretax margins of just 3% to 5%, meaning even a 2%-to-4% payment cost is far from trivial 15. Unlike big-box retailers, small merchants generally lack the transaction volume to negotiate better rates from processors, leaving them as price-takers in a market where Visa and Mastercard control more than 80% of general-purpose card processing 141520. Options for owners are limited and imperfect: absorb the cost, raise prices across the board, add a visible surcharge (capped at 3% by Visa and 4% by Mastercard, and banned outright in a few states though allowed in Oregon), or push customers toward cash 16.

Card fees intersect with small-business finance in a second way. The Federal Reserve's 2025 Small Business Credit Survey found that 86% of small employer firms use financing regularly, with credit cards among the most common tools, and that 56% of financing applicants sought funds simply to cover operating expenses 1718. Only 42% of applicants received the full amount they sought, and firms turning to online lenders — now nearly 29% of applicants, up from 17% in 2020 — were far more likely to report higher-than-expected borrowing costs than those going to small or large banks 18. The same Fed research found revenue and employment growth holding steady but expectations for the future falling to their lowest levels since 2020, with rising costs of goods, services and wages cited as the top financial challenge 19.

The federal fix on the table

The Credit Card Competition Act, sponsored by Sens. Dick Durbin and Roger Marshall, would require banks with at least $100 billion in assets to enable at least one unaffiliated processing network alongside Visa or Mastercard, mirroring debit-card routing reforms enacted in 2010 141520. Durbin's office says Visa and Mastercard charged merchants $101 billion in credit-card fees in 2023 alone, and that the bill could save merchants and consumers over $17 billion a year 20. Restaurant and retail trade groups echo that estimate and point out that debit-card competition after 2010 produced roughly $9 billion in merchant savings, 70% of which was passed to consumers through lower prices 15.

Not everyone agrees the bill is good policy. A Montana small-business owner writing in the Missoulian argued the legislation would ultimately hurt small businesses rather than help them, though the letter does not detail the mechanism beyond warning that the bill's framing is misleading 7. The Congressional Research Service, for its part, offers a more measured account: reducing interchange doesn't guarantee a lower total merchant discount rate if other fees rise, and it is not certain merchants would pass any savings on to consumers 13.

Where the reporting agrees

Across the outlets covering swipe fees, there is consistent agreement that card processing costs are large, rising, and concentrated among Visa and Mastercard, which together control roughly 80% or more of the market 9141520. There is also agreement that a bipartisan federal bill exists to address this through network competition rather than a fee cap, and that its backers cite savings in the $15-to-17-billion-a-year range 9141520. On the Oregon side, multiple accounts of the Prosperity Council survey — KATU, Hoodline and the council's own June report as covered by OregonLive — agree on the basic contours: over 1,000 respondents, a roughly 60/40 split between outside-Portland and Portland-area participants, and a shared conclusion that costs, taxes and red tape are the dominant complaints 101112.

Where it doesn't

The clearest numerical divergence is in the swipe-fee totals themselves. Squillo's commentary cites $157 billion in 2025 swipe fees, up $9 billion from 2024, while a trade-publication account citing the Nilson Report puts the comparable 2025 figure at $157.8 billion, with a combined credit-and-debit total of $198.25 billion 914. These are close enough that the gap likely reflects rounding or a difference in what is being measured — credit-only versus credit-plus-debit — rather than a real factual conflict, but it means readers encounter slightly different headline numbers depending on which piece they read.

A more substantive divergence is over what the Credit Card Competition Act would actually accomplish. Advocacy and industry sources treat the $17 billion savings estimate largely as fact, presenting it with little qualification 141520. The Congressional Research Service is the outlier, explicitly cautioning that debit-card routing reform produced savings that were limited and unevenly distributed, and that it remains uncertain whether merchants would pass any new savings to consumers 13. That is a meaningful difference in framing: one set of sources treats the bill's benefits as a near-certainty, while the more technical, nonpartisan source treats them as a plausible but unproven outcome.

There is also a difference in what counts as "the story." The Oregon Capital Chronicle piece is explicitly a commentary from a business owner, not a report on enacted policy — no Oregon law currently exempts tips from swipe fees, and neither Wyden nor Merkley has publicly committed to the federal bill 9. Coverage of the Prosperity Council, by contrast, documents an actual government process with survey data, named officials and a formal June report 101112. Conflating the two would be a mistake the sources themselves do not make, but the shared publication context — both surfacing amid the same competitiveness debate — invites readers to link them more tightly than the underlying facts support.

Finally, the Missoulian letter stands alone in opposing the Credit Card Competition Act from a small-business perspective, without the detailed data the other sources provide 7. It is one voice against a larger, more heavily footnoted consensus favoring the bill among restaurant and retail trade groups and the bill's Senate sponsors 141520.

The reading the evidence supports

On the narrower ask — exempting tips from swipe fees — the case is strong and largely uncontested in the sources: the money is already itemized for accounting purposes, it isn't the business's revenue, and no source offers a substantive counterargument. On the larger competition bill, the evidence supports treating the $17 billion figure as a credible but industry-generated estimate rather than a settled outcome, given the Congressional Research Service's explicit caution about how debit-card reform actually played out. The Oregon competitiveness debate, meanwhile, is real and well-documented, but swipe fees are one item on a much longer list — taxes, permitting, housing costs and labor shortages loom larger in the state's own survey data. The throughline connecting all of it is that small businesses operate on thin margins and limited bargaining power, making even modest, well-targeted fee relief meaningfully more valuable to them than to larger competitors.