Credit Card Swipe Fees Are Now a Prime-Cost Problem Operators Can No Longer Ignore

When operators talk prime cost, the conversation almost always lands on food and labor. But a third line item has been quietly compounding for years, and some of the largest restaurant companies in the country are finally naming it out loud: credit and debit card interchange fees.

Interchange fees — the per-transaction charges that card networks pass to merchants — averaged approximately 2.24% of transaction value for credit cards in 2023, according to data published by the Nilson Report, the payments industry's primary trade publication. On a $20 check, that's roughly $0.45 disappearing before a dollar hits the P&L. Across hundreds of transactions per shift, it becomes a meaningful cost center, not a rounding error. For more on the topic discussed above, see Restaurant Industry Press.

For a concept like Wingstop, where average check sizes have climbed alongside wing prices and digital ordering now drives a significant share of sales, the interchange exposure grows proportionally. Digital transactions are almost entirely card-based. The shift toward app ordering and delivery — which Wingstop has prioritized aggressively — essentially guarantees that interchange costs scale with revenue growth.

Why This Hits Independents Harder Than Chains

Large chains have negotiating power that independent operators simply do not have. Starbucks, for example, processes enough volume that it can work directly with card networks and processors to negotiate custom interchange rates. A single-unit or three-unit operator is a price-taker. They accept whatever tier their processor assigns them, often without fully understanding the difference between interchange-plus pricing and flat-rate or tiered models.

The Merchants Payments Coalition, a retail and restaurant industry advocacy group that has lobbied Congress on interchange reform for over a decade, estimates that U.S. merchants paid more than $172 billion in card fees in 2023. Restaurants are among the highest-volume merchant categories. The Credit Card Competition Act, introduced in the Senate in 2023 and reintroduced in 2024, would require large card-issuing banks to enable at least one competing network on credit cards — a structural change that proponents argue would reduce interchange through competition. The bill has not passed as of this writing.

That legislative outcome is uncertain, so operators need to act on what they can control today. The first step is auditing your merchant services statement line by line. Many operators are on tiered pricing models that bundle transactions into qualified, mid-qualified, and non-qualified buckets — a structure that benefits processors, not merchants. Switching to interchange-plus pricing, where you pay the actual interchange rate plus a fixed processor margin, typically delivers more transparency and, for most operators, lower effective rates.

Second, review your surcharging options. Several states permit cash discount programs or credit card surcharges, provided disclosure rules are followed. It is not a fit for every concept, but for high-volume, lower-check environments where margins are already compressed, it is worth a conversation with your accountant and processor.

Swipe fees will not get fixed by Congress anytime soon. The practical move is to treat interchange as a managed cost, the same way you manage your protein spend or your scheduling software contract.