Betty Dovalina

Breaking: San Antonio Merchants Face Fee Pressure as Card-Processing Settlement Moves Forward

Dateline: San Antonio – A landmark settlement proposal shaping credit card interchange fees is rekindling discussions among local business owners who say processing costs are squeezing margins. As nationwide talks unfold, small shops here report mounting swipe fees and the looming possibility of passing those costs to customers.

Betty Dovalina, who runs Betty’s Flower Shop on Southwest Military Drive, says her monthly outlay to card issuers and processors reached about $2,500 before she began charging a small “credit card” fee to customers. She says the shift, prompted by escalating processing costs after Valentine’s Day and Mother’s Day, was painful but necessary to stay afloat.

Across the city, similar struggles are surfacing. Wholesalers and processing partners have added to the burden with their own tariff and service fees, leaving many owners feeling they have little choice but to adjust pricing or acceptance policies.

San Antonio retailers aren’t alone. A long-running federal lawsuit over interchange fees has led to a proposed settlement that would reshape how banks charge merchants for credit card transactions. Major retailers, however, have voiced objections, arguing that the deal does not adequately curb excessive fees.

The Electronic Payments Coalition, which represents Visa, MasterCard and their partner banks, argues that the current fee structure funds essential protections-such as fraud prevention-within the card networks. Critics, including small-business associations, say the reforms don’t go far enough to shield consumers and merchants from rising costs.

Locally,merchants say the impact is real. Blanca Aldaco,owner of Aldaco’s,a Stone Oak restaurant,is nearing a tipping point in passing costs to diners. She currently transfers about $18,000 each month to card companies, totaling more than $200,000 a year. She warns that if costs continue to rise, she may soon add a card-fee line to receipts to preserve pricing for her team and guests.

Restaurant owners like Aaron Selinkoff of Specht’s Texas note that card usage has climbed in recent years and now represents about 90% of their business. He stresses that rewards programs and premium cards drive higher fees, a burden many say is shouldered by merchants rather than card issuers.

The debate stretches beyond fees. Local figures say the burden is worsened by inflation and tariffs, shrinking margins and forcing tough decisions about staffing and reinvestment. Some seasoned operators caution that even modest surcharges can erode loyalty if customers feel nickel-and-dimed.

What’s in Play: The Interchange Settlement and Its Contenders

The core issue centers on interchange fees-the charges banks levy on merchants for processing card transactions. A proposed settlement would,for a defined period,reduce these fees and cap their growth,offering markets more adaptability to negotiate rates. Yet critics argue the reforms insufficiently limit the balance of power held by the networks and banks.

Walmart and other large chains have formally objected to the settlement, contending that the proposed changes do not go far enough to curb what they see as excessive costs. In contrast, trade groups representing merchants say the package would help independents and small businesses maintain pricing while preserving network security.

Key details cited by supporters include a five-year reduction in specific interchange charges and eight years of capped growth. The agreement would apply mainly to banks’ fees linked to card transactions and would not directly regulate all card networks, especially non-customary players like American Express and Discover, which account for a smaller share of the market.

Local observers point to broader implications. If the settlement advances, merchants could enjoy more pricing flexibility, group bargaining options, and potential relief from annual fee creep. If it stalls, small businesses may continue to struggle with unpredictable costs as card adoption grows across sectors.

Two Sides of the Coin: Case Studies from San Antonio

Betty’s Flower Shop has publicly shared how card fees squeezed cash flow, notably on large events were card-based payments spiked. To offset costs, the shop began offering customers a modest credit card surcharge to keep event pricing sustainable.

Aldaco’s and Specht’s Texas describe similar experiences, noting that premium and rewards cards contribute to the fee burden. Both owners say they aim to balance fair pricing with the desire to reward staff and invest in their businesses, while acknowledging that the model relies on consumers’ willingness to pay a small extra for card transactions.

Industry voices emphasize ongoing investments behind the networks. Proponents cite fraud protection improvements and security enhancements as justifications for the current fee structures, while opponents point to rising consumer costs and the need for more competitive practices.

Table: At-a-Glance Facts About the Settlement and Its Local impact

Evergreen Takeaways for Merchants

For small businesses nationwide, the core question remains: how to manage card costs without alienating customers. Transferring costs via transparent surcharges or cash discounts is one strategy some shop owners cite as workable, while others prefer absorbing a portion of the fees to maintain customer goodwill. The trend toward high-reward cards and digital payments continues to push processing costs higher, underscoring the importance of clear pricing strategies and regular reviews of payment partners.

What’s Next

Observers say the settlement’s fate hinges on how aggressively lawmakers and regulators balance merchant relief with network security and reliability. As the debate unfolds, business owners are urged to monitor official updates and consult their financial partners on compliant, transparent ways to handle processing costs.

Disclaimer: Fee structures and interpretations can vary by jurisdiction and contract terms. This article provides a summary based on current public data and is not legal advice.

Reader Questions

1) Do you support allowing merchants to charge a small fee for card transactions, or should pricing remain card-free for customers?

2) If you own a business, would you consider cash discounts or surcharges as a practical way to manage processing costs?

for more context on national developments, see ongoing coverage of the interchange-fee settlement and related industry responses from major outlets.

Share your perspective in the comments and tell us how card fees affect your purchasing choices.