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- With the production of the penny ended, some states have enacted laws governing how to round change in cash transactions to the nearest nickel, and a bill in Congress that would provide rounding guidance has cleared both the House and Senate.
- While rounding could work in a consumer’s favor, the increasing use of surcharges for credit-card transactions only pushes the customer’s total transaction cost higher.
- A pending settlement for a long-running lawsuit against Visa and Mastercard could result in even more differences in how merchants price transactions for credit cards.
Nicolasmccomber | E+ | Getty Images
For consumers, the actual amount paid at the cash register increasingly depends on the payment type used.
Given the end of penny production last year by the U.S. Mint, many merchants have begun rounding cash payments up or down to the nearest nickel. States have passed laws governing how rounding can be handled, and a federal law offering guidance for doing so could be on its way.
At the same time, consumers may be encountering credit-card surcharges more often at some retailers and service providers, experts say, which pushes up the total cost for paying by credit card.
“What we are seeing is more merchants, the smaller merchants, imposing surcharges,” said Crystal Kaldjob, a partner with Goodwin Procter in Washington, D.C., who works in the law firm’s financial industry group.
Cash use is down while credit card transactions are up
The changes at the register come as cash use has declined over time and credit card use has grown.
Consumers made an average of 47 payments per month in 2025, according to the 2026 Diary of Consumer Payment Choice, an ongoing study released annually since 2015 by the Federal Reserve. Most of those payments — an average of 16 — were completed using a credit card, 15 with a debit card and six with cash. The rest involved checks or other methods.
For comparison, in 2016, consumers made an average of 45 monthly payments, with cash the most common form of payment, appearing in 14 transactions, followed by 12 with debit cards and 8 with credit cards.
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Cash tends to be used by older and more rural populations, as well as low-income households, according to the Fed’s research.
States and Congress explore rounding rules
The last penny for circulation was issued in November by the U.S. Mint in Philadelphia, marking the official end of the coin’s 232-year production. In the decade leading up to that, the cost of producing each penny rose to 3.69 cents per coin from 1.42 cents, according to the U.S. Mint. An estimated 300 billion pennies are still in circulation.
Since the penny ceased production, 20 states have passed laws either allowing cash rounding or requiring it, and others are considering it, according to the National Cash Rounding Legislative Observatory published by Centsless, a regulatory compliance platform.
A bipartisan bill in Congress called the Common Cents Act would allow, but not require, merchants to round a total up or down to the nearest nickel if exact change cannot be provided, among other provisions.
“A lot of the merchants that I work with really want some clarity so they can move forward with a policy as to how they manage customers who are paying cash in stores,” Kaldjob said.
The measure calls for rounding down if the total ends in 1, 2, 6 or 7 cents and rounding up if it ends in 3, 4, 8 or 9 cents.
The bill has cleared both the House and Senate, but differences between the two versions would need to be resolved before final passage. It’s uncertain whether or when that may happen.
Surcharges offset merchant costs
Meanwhile, although merchants have been permitted by Visa and Mastercard since 2013 to charge surcharges for credit card use — not for debit cards — more small merchants are adding them now to offset their costs, experts say.
Merchants have generally complained that “swipe fees” — the amounts they pay when customers use a debit or credit card — are too high, particularly for credit card transactions. The average amount was 2.35% of the purchase price in 2024, compared with 2.02% in 2010, according to the National Retail Federation.
The use of surcharges by some merchants “is definitely a product of the high swipe fees that they’re paying,” said Dylan Jeon, vice president of government relations for the National Retail Federation.
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In 2024, credit card spending was up 5.1% from 2023 to about $6.46 trillion, according to the Nilson Report, a publication that focuses on the global card-payment business. Credit-card processing fees were up more, by 9.3% to $148.52 billion.
Swipe fees totaled nearly $200 billion last year, Jeon said. Additionally, swipe fees are the second-highest operating cost for most retailers after labor, he said.
A pending settlement related to an antitrust lawsuit originally filed in 2005 by retailers against Visa and Mastercard would reduce swipe fees and allow merchants to reject certain credit cards that come with higher fees — something they have been unable to do under their agreements with the two payment networks. In other words, absent the settlement, if a merchant accepts one Visa card, they must accept all Visa cards, regardless of a difference in the swipe fees charged.
However, retailers are generally in opposition to the settlement, Jeon said.
“The face value looks great, but when you kind of look under the hood, the benefits offered to merchants are woefully insufficient,” Jeon said. “It also doesn’t touch on the core issue of this interchange system, which is lack of competition.”
Visa pointed CNBC to its statement on the settlement, which says the settlement “would provide U.S. merchants of all sizes with meaningful relief, more flexibility, and options to control how they accept payments from their customers.”
Mastercard provided its previously issued statement, which says the company believes “this agreement delivers on the expectations of the court and balances the interests of all parties involved.”
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