Lawmakers in the Colorado House recently passed House Bill 1282, a landmark bill that would save small businesses thousands of dollars by eliminating credit card fees on taxes and tips. It’s a long-overdue move that addresses a growing pain point for entrepreneurs who are already operating on razor-thin margins.
Now, the Colorado Senate and Gov. Jared Polis have a golden opportunity to get this bill over the finish line to stop Main Street businesses from being squeezed.
Credit card interchange fees, also referred to as “swipe fees,” are quietly draining dollars from small businesses across the country. Each time a customer swipes a credit card to pay for something — whether it’s a burrito at my restaurant or a movie ticket at a local theatre — the business is forced to pay the credit card company and bank this fee.
Swipe fees generally amount to between 2% and 4% of a sale. And while it may seem like a drop in the bucket, these fees add up quickly — often totaling tens of thousands of dollars. Taken together, swipe fees cost U.S. merchants more than $148 billion last year — an increase of roughly $12 billion compared with 2023.
To make matters worse, consumers often end up footing part of the bill. That’s because many small businesses don’t have the extra cash to cover these exorbitant costs, forcing them to raise prices. It’s estimated that American families pay an additional $1,200 each year thanks to the swipe fees.
You may be wondering why businesses are being held hostage to this practice. Consolidation in the payments arena is largely to blame. Visa and Mastercard control over 80% of the credit cards on the market, creating what is effectively a duopoly. This death grip on the market has allowed Visa and Mastercard to raise fees every year with minimal pushback. Since the pandemic, for example, swipe fees have risen an alarming 50%.
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1:30 AM MDT on Apr 23, 20252:36 PM MDT on Apr 22, 2025Fortunately, lawmakers in Colorado have begun to catch on to this scheme and are deliberating on a bill that would eliminate swipe fees on taxes and tips. While it’s not a silver bullet, the measure is expected to save some small business owners in the state upward of $10,000 each year. That’s extra cash that could be reinvested into the business, which could include lowering consumer prices, increasing employee pay or expanding operations.
On the federal side, another bill called the Credit Card Competition Act would take this one step further — reducing swipe fees on every part of a customer purchase by increasing competition in the credit card arena, not just addressing sales taxes and tips. The bill would require big banks with over $100 billion in assets to include a second processing network beyond Visa and Mastercard on the credit cards they issue to customers.
The measure has garnered a broad bipartisan backing in the past, but has not yet been reintroduced to this Congress by its main sponsor Sen. Dick Durbin, D-Illinois. If enacted, it is projected to save small businesses across the U.S. over $16 billion. No wonder recent polling finds 77% of small businesses nationwide favor the legislation.
Smart policymaking can help to supercharge Colorado’s small business community. As federal lawmakers weigh legislation that would provide relief to Main Streets nationwide, Colorado’s elected leaders at the state Capitol can set a precedent by eliminating swipe fees on taxes and tips. I urge the Colorado Senate and the governor to finish the job.
Chris Strowmatt of Denver is the general manager of Blue Bonnet Restaurant.
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