The post-penny economy is reshaping what consumers pay at the register, with cash rounding and credit card surcharges becoming more common. The U.S. Mint ceased penny production in 2022, leading many merchants to round cash payments to the nearest nickel. Currently, 20 states have enacted laws governing this practice, and a federal law could soon follow. Meanwhile, consumers are encountering credit card surcharges more frequently, as small merchants seek to offset high processing fees.
Cash Rounding
With the end of penny production, merchants have begun rounding cash payments to the nearest nickel. This practice, known as cash rounding, is now allowed in 20 states, with more considering it. A bipartisan bill, the Common Cents Act, has cleared both houses of Congress, allowing but not requiring merchants to round cash payments. This bill aims to provide clarity to merchants and customers alike about how cash transactions will be handled in the era of the post-penny economy.
Under the proposed law, if the total ends in 1 or 2 cents, it would be rounded down to the nearest nickel. If it ends in 3, 4, 8, or 9 cents, it would be rounded up. This method of rounding ensures that merchants neither gain nor lose money from the practice. However, the House and Senate versions of the bill differ in their specifics, including the exact rounding rules and merchant requirements. A resolution is uncertain, but legislators are working to bridge the differences and enact a full law.
Cash vs. Card Usage
These changes at the register occur as cash use declines and credit card transactions rise. In 2026, consumers made an average of 47 payments per month, with 16 using a credit card, 15 with a debit card, and six with cash. This marks a significant shift from 2016, when cash was the most common form of payment, used in 14 transactions.
Cash remains more prevalent among older, rural populations and low-income households, according to Federal Reserve research. Consumers aged 65 and over, for instance, made an average of 11 cash transactions per month in 2026, compared to just 3 among those aged 18 to 25. Similarly, low-income households made an average of 9 cash transactions, while higher-income households made only 4.
Meanwhile, credit card use has grown significantly. In 2024, credit card spending increased by 5.1% to about $6.46 trillion. This growth can be attributed to various factors, including increased consumer confidence, the convenience of credit card transactions, and the accumulation of rewards points and cashback offers.
Credit Card Surcharges
To offset high ‘swipe fees’—charges for processing credit card transactions—more small merchants are imposing surcharges. The average swipe fee was 2.35% of the purchase price in 2024, compared with 2.02% in 2010. This increase, coupled with the rising cost of goods and services, has led many small businesses to pass on these costs to their customers.
A pending settlement in an antitrust lawsuit aims to reduce these fees and give merchants more flexibility in accepting cards. Filed in 2005, the lawsuit alleges that Visa and Mastercard conspired to fix swipe fees at artificially high levels. The proposed settlement would cap interchange fees, allow merchants to reject certain credit cards with higher fees, and provide other relief measures.
However, the retail industry generally opposes the settlement. Retailers argue that the proposed changes do not go far enough to address the root causes of high swipe fees and lack of competition. For example, the settlement would not address the monopoly power held by Visa and Mastercard over network branding and access to their networks. As such, the settlement may not significantly improve the competitive trends of the credit card market.
