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The Swipe Tax Survival Report: How credit card fees are changing SMB decision-making

Monday, July 27, 2026 — 16:40:32 (UTC)

The Swipe Tax Survival Report from Kurv: How Credit Card Fees Are Changing SMB Decision-Making

Crowley, Texas, July 27, 2026— For many small business owners, rising costs are no longer a temporary challenge — they’ve become the defining reality of running a business in 2026. According to the U.S. Chamber of Commerce, 53% of small and medium-sized businesses (SMBs) now cite inflation as their biggest concern, and according to the MetLife & U.S. Chamber of Commerce Small Business Index, 70% say rising prices have directly impacted their operations over the past year. Another 34% say cost pressures are now the single biggest obstacle preventing business growth.

To better understand how the pressures of processing fees are affecting small businesses, and how consumers feel about convenience pricing at checkout, we surveyed 461 SMB owners and 1,007 consumers about rising payment costs, spending trade-offs, and payment behavior. For many merchants, those fees are no longer just a routine cost of doing business. They’re quietly competing with marketing budgets, equipment upgrades, inventory purchases, hiring plans, and personal savings. In fact, our new research found that nearly half of SMB owners (47%) now spend more on credit card processing fees than they do on growing their business. What was once treated as a background operational expense, tied to payment processing and merchant services, is increasingly becoming a growth constraint.

Key Takeaways

Over one in three SMB owners (37%) have made sacrifices due to card fees in the last year, and 40% of those have dipped into personal savings. Eighty-three percent of SMB business owners can’t state their effective processing rate from memory — meaning the vast majority are absorbing a cost they can’t clearly define.

Nearly two-thirds of consumers (65%) are more willing to pay a convenience fee at a local business than a national retailer — and more than one in four say it won’t affect where they shop.

Gen Z is 19% more likely than any other generation to pay convenience fees to support small businesses over national retailers.

Nearly half of SMB owners (47%) spend more money on credit card fees than on growing their business.

Many SMB owners may be underestimating how much they’re actually spending on credit card processing. Only 17% of business owners said they could confidently state their effective processing rate from memory, while most either needed to check their statements or admitted they weren’t fully sure what they were paying.

We’ve consistently seen that many merchants don’t realize the true scale of processing costs until they step back and calculate the annual impact. When merchants actually sit down and calculate what they’re paying in credit card processing over the course of a year, the numbers can be eye-opening. Even businesses with competitive rates often pay 2% to 3% per transaction, and for higher-volume merchants, that can easily add up to tens of thousands of dollars annually.

To view the full report, visit kurvpay.com/blog/how-credit-card-fees-slow-small-business-growth/

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Source: Company press release.

Categories: Reports and research