Checkout Fees: Think Twice Before Reaching for Plastic

credit card payment

As a result of a lawsuit settlement, credit card companies have agreed to pay back some of the fees ($8 billion) for unlawfully fixing “swipe fees” – but only for 8 months.

In the past, these annoying fees have been the burden of the merchant, footing the bill for accepting your payment and paying $40-$50 billion in processing fees to credit card companies each year. If you’re a business doing $2 million in transactions a year, you will pay credit card companies up to $80,000. That’s a lot of money to pay in order to receive money.

Good News for Merchants

If they choose to, merchants can now charge customers a checkout fee for paying with a credit card. These fees typically range between 2-3% of the purchase total, but can be as high as 4%. Meaning: customers will be paying up to $40 on top of a $1,000 purchase.

Bad News for Merchants

Merchants probably don’t want to charge this fee to their customers. The credit card companies agree: Mastercard said that they “don’t expect most merchants to put the surcharge into effect, since stores won’t want to drive away business.” Which means merchants will probably continue absorbing the cost of accepting credit cards.

It seems that credit card companies don’t care who is paying them, just as long as they are getting paid.

It’s up to you, the consumer, to decide whether or not you want more of your money to go to your favorite local merchant, or to the credit card companies. Think twice before reaching for that plastic. Consider paying with cash or Dwolla, and help save them thousands of dollars per year.


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  • Eric Tjossem

    With Dwolla, it’s up to the consumer to decide whether he/she wants to cover the 25 cent processing cost (usually less than a CC would charge). It’s a great middle road: it totally avoids driving off price-sensitive customers, but also cuts down on the fees the merchant pays.

  • Mel

    I’ve wondered if merchants are required to tell you they are charging the surcharge to the customer.

    • CaityJones

      They are required to have it clearly communicated at the point of sale.

  • Drew

    This is great, but where can I use Dwolla now and how can I encourage merchants to accept Dwolla?

    • CaityJones

      Some of our Dwolla merchants can be found here:, or within your account under the Places tab. You can also request locations near you to accept Dwolla from within this tab.

      Setting up a Dwolla account is free, whether it’s a personal, nonprofit or business account, and it costs only $0.25 to receive a transaction (unless it’s $10 or under, then it’s free). You can direct businesses to this link for more information:, and we’re always available at to answer any questions and supply additional information.

  • Paul Provenzno

    We are excited to share that in our mCommerce platform in which Dwolla is the preferred payment method, we absorb any transaction fees and incorporate a community based loyalty platform in which consumers and businesses benefit. Stay tuned, coming to a city near you soon!

    • Lane Romero-Reiss

      Hi Paul. It sounds similar to a program I’m working with, but I think it might actually be different. Does the loyalty platform you are referring to come from Europe, by any chance?

  • Jason

    Which POS systems currently are capable of supporting Dwolla payments? I would accept every type of payment method possible if the POS system supported it. Running transactions outside of the POS system causes too many problems with a large business.

    • CaityJones

      Hi Jason – what POS system do you have?

      • Jason

        Quickbooks POS

        • CaityJones

          Looks like we may be able to do an integration: Thanks for sharing! Will look into this.

          • Kim Mikeska

            If you can, please let me know as well. I also use Quickbooks POS… but I will tell you that they are not compatible with ANY merchant service other than their own… they have cornered the market with their own customers. I now use a separate terminal for merchant services and have to make all of my entries in POS as “check” payments, then sort out checks and credit card payments after it integrates with my Quickbooks Financial software. Pain in the rear!

      • Danielle LeComte

        Are there other POS systems that Dwolla works with?

        • CaityJones

          Off the top of my head, Aloha and Restaurant Manager are both systems that we’ve worked with in restaurants and coffee shops here in Des Moines and have found fairly easy to add a Dwolla option in. We’re also integrated with an awesome POS system called Change ( Dwolla itself can be used to accept payments outside of a traditional POS system (

  • Susie Steiner

    Can Dwolla be used in mobile apps?

  • Shirley Mason

    How is Dwolla used at a merchant? Is there a card of some sort for the consumer?

    • CaityJones

      Hi Shirley –

      A merchant signs up for a Dwolla account, and they can accept Dwolla payments from their customers as long as they have also set up a Dwolla account. They can accept payments online if they are an online merchant, and customers can use the Dwolla smartphone app to send payments in-store with their phone. Here’s an example of what that would look like:

Financial institutions play an important role in the Dwolla network.

Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.