How the Fair Swipe Act of 2025 Impacts Swipe Fees—And Why Dual Pricing Wins

The world of credit card processing is always evolving, and recent regulatory efforts aimed at reforming swipe fees have caught the attention of business owners and payment processors alike. In Washington D.C., the Fair Swipe Act of 2025 proposes to lower the burden of credit card processing fees by ensuring sales tax and gratuities are excluded from the total amount on which these fees are calculated. While this may seem like a win for merchants, the reality is that processing costs remain significant. This is why more businesses are turning to dual pricing—a transparent, compliant, and customer-friendly alternative to cash discounting and surcharging.

Understanding the Fair Swipe Act of 2025

Swipe fees—also known as interchange fees—are charges that businesses pay to process credit card transactions. These fees typically range from 1.5% to 3.5% per transaction, making them a significant expense for merchants. The Fair Swipe Act of 2025 aims to lower these fees by preventing payment networks from calculating interchange on non-revenue amounts like sales tax and tips.

While this law may provide slight relief, the truth is that credit card fees will still be a major cost for businesses. Instead of waiting on incremental regulatory changes, merchants need a proactive, long-term solution—dual pricing offers exactly that.

Why Dual Pricing is the Best Alternative

Dual pricing presents customers with clear, upfront pricing: one price for cash payments and another for credit card transactions. Unlike cash discounting, which can create confusion about whether a discount is being applied or a fee is being waived, dual pricing is fully transparent and ensures customers always know what to expect.

With surcharging, businesses are required to navigate a complex web of regulations, and customers often push back against the additional cost. Dual pricing avoids these issues by giving customers a choice at the point of sale, allowing them to decide how they want to pay without any surprises at checkout.

Source: Nerdwallet.com

The Limitations of Cash Discounting

Cash discounting was one of the first strategies used to offset processing fees, but it often leads to misunderstandings and compliance concerns. Customers may feel tricked if they only realize they are receiving a cash discount after seeing their total price. This approach also raises potential compliance issues in states with strict discounting laws. Dual pricing solves this by displaying both prices clearly and ensuring compliance with regulations nationwide.

The Downside of Surcharging

While surcharging can help businesses recover processing fees, it has significant drawbacks. Many customers dislike seeing an extra fee added to their bill, leading to dissatisfaction and lost sales. Additionally, surcharging is heavily regulated, with certain states outright banning it or imposing strict rules on implementation.

With dual pricing, merchants avoid the negative customer perception associated with surcharges while still maintaining full control over their pricing structure. Rather than surprising customers at checkout, dual pricing provides an upfront, fair comparison, leading to greater acceptance and trust.

Source: Axios.com

The Smart Move for Business Owners

Merchants need to control their expenses while maintaining customer satisfaction. Dual pricing provides the perfect balance—it ensures businesses aren’t losing profits to processing fees while keeping transactions straightforward and transparent for customers.

Here’s why merchants should choose dual pricing over other models:

• Regulatory Compliance: Unlike surcharging, dual pricing is compliant in all states and doesn’t carry the risk of legal restrictions.

• Customer Satisfaction: Unlike cash discounting, dual pricing eliminates confusion by clearly displaying both payment options.

• Predictable Profit Margins: Merchants can consistently recover processing costs without alienating customers.

  
  

Final Thoughts

The Fair Swipe Act of 2025 may reduce some swipe fees, but credit card processing costs are here to stay. Rather than relying on small regulatory adjustments, merchants should adopt a proven, compliant, and customer-friendly solution: dual pricing. By offering a clear, upfront choice to customers, businesses can maintain transparency, maximize profits, and stay ahead in an evolving payment landscape.

For merchants looking to transition to dual pricing, SignaPay Direct provides industry-leading solutions designed for seamless implementation. Contact us today to learn how dual pricing can transform your business and eliminate unnecessary credit card processing costs.

Ready to protect your margins and take control of your costs? Contact SignaPay Direct today to learn more about how dual pricing can work for your business!