This NFIB analysis addresses a massive “hidden” expense for small businesses: Credit Card Swipe Fees (also known as interchange fees). Since the original article is brief, I have expanded it into a comprehensive deep dive that explains the mechanics of these fees, the “duopoly” problem, and the specific legislation currently in the spotlight.
This NFIB analysis addresses a massive “hidden” expense for small businesses: Credit Card Swipe Fees (also known as interchange fees). Since the original article is brief, I have expanded it into a comprehensive deep dive that explains the mechanics of these fees, the “duopoly” problem, and the specific legislation currently in the spotlight.
The Hidden Tax on Main Street: Why Small Businesses Are Fighting Back Against Rising Swipe Fees
For most small business owners, every time a customer taps, chips, or swipes a credit card, a significant portion of that sale vanishes before it even hits the bank account. These “swipe fees” have become the third-highest operating cost for many small businesses, trailing only labor and rent.
As inflation continues to squeeze margins, the NFIB is leading a national demand for legislative reform to break the “duopoly” that controls the credit card market. Here is a detailed look at why this issue has reached a boiling point.
1. The Mechanics of the "Swipe Fee"
When a customer uses a credit card, the merchant (the business) is charged a fee that typically ranges from 1.5% to 3.5% of the total transaction. While this sounds small, it is a percentage of revenue, not profit. For a business with 10% profit margins, a 3% swipe fee actually eats up 30% of their total profit on that sale.
These fees are set by the giant card networks (Visa and Mastercard) but are collected by the banks that issue the cards. Because these fees are often a percentage of the total transaction—including sales tax—swipe fees actually act as an “Inflation Tax.” As prices for goods go up, the dollar amount collected in swipe fees rises automatically, even if the service provided by the bank hasn’t changed.
2. The Duopoly Problem: Visa and Mastercard
The primary driver of high fees is a lack of market competition. Visa and Mastercard currently control over 80% of the credit card market.
Unlike other industries where competition drives prices down, Visa and Mastercard set the interchange rates centrally for all the thousands of banks that issue their cards. This means banks don’t have to compete on price to get a merchant’s business. If a small business wants to stay in business, they must accept these cards, leaving them with zero bargaining power to negotiate lower rates.
3. The Credit Card Competition Act (CCCA)
The “legislation” mentioned by the NFIB refers primarily to the Credit Card Competition Act. This bipartisan bill aims to inject competition into the market by requiring the largest banks (those with over $100 billion in assets) to offer at least two different routing networks for every credit card transaction.
Currently, Visa and Mastercard mandate that transactions made on their cards must be processed through their own proprietary networks. The CCCA would force them to allow at least one independent network (like NYCE, Star, or Shazam) to compete for that transaction. Experts estimate that this competition could save small businesses and consumers over $15 billion annually.
4. Why This Matters for the Consumer
Swipe fees are not just a “business problem.” Because businesses cannot afford to absorb these rising costs, they are often forced to:
- Raise Prices: Passing the fee onto the consumer.
- Surcharge: Adding a 3% fee at the register for credit card use.
- Minimums: Requiring a $10 or $15 minimum for card use, which can turn away customers.
Furthermore, the NFIB points out that swipe fees effectively subsidize high-end “rewards” cards. Lower-income consumers who pay with cash or debit are essentially paying higher prices for goods to fund the “points” and “miles” enjoyed by premium credit card users.
5. The Soho SoCal Perspective: Protecting Your Bottom Line
At Soho SoCal, we view swipe fees as a “leak” in your wealth stewardship. While we focus on protecting your assets through insurance and strategic planning, we also believe in advocating for the “Quiet Confidence” that comes from fair market practices.
Strategic Tips for Business Owners:
- Evaluate Cash Discounts: Many states now allow “Dual Pricing” where you offer a lower price for cash/debit and a standard price for credit.
- Review Your Processor: Ensure you are on an “Interchange Plus” pricing model rather than “Tiered” pricing, which is often much more expensive for small businesses.
- Join the Advocacy: Follow the NFIB’s efforts on the CCCA. Your voice as a local business owner carries significant weight with Congressional representatives.
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It’s an honor to witness the official Irvine Global Trade Day ribbon-cutting ceremony and the proclamation ceremony. May 7th marks a significant day for a diverse business community that is thriving and demonstrating the enduring nature of international collaboration.
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Last Thursday, I had the distinct honor of attending the 12th Annual Orange County World Trade Week at the University of California, Irvine. Joining over 200 business leaders, academics, government officials, and consular officers, the energy in the room was a testament to Orange County’s vital role in the global economy.
As the Founder of Soho SoCal and President of VNARP Southern California, attending this summit was about more than just staying informed—it was about advocating for our community’s place in the international market.
1. Key Insights from the Global Frontier
The agenda was packed with high-level insights that directly impact how we advise our clients and lead our organizations:
- Technology in Logistics: Hearing from Luis Eraña (CEO of Alba Wheels Up) regarding the integration of AI in global logistics was eye-opening. It is clear that data-driven precision is becoming the backbone of successful supply chains.
- The State of Our Ports: An update on the Port of Los Angeles provided a clear picture of the infrastructure that keeps our local economy moving and connected to the world.
- Trade Policy & Advocacy: The discussions surrounding the USMCA and the update on Foreign Trade Zones are crucial for any business owner looking to scale and protect their operations in today’s volatile market.
2. The Power of Diplomacy and Relationships
One of the most valuable aspects of the day was the opportunity to meet with Consul Generals from more than 10 countries. These interactions reminded me that while trade is built on policy and logistics, it is sustained by human relationships.
Whether we are discussing international treaties or local wealth stewardship, the “Human Value” remains the ultimate currency. The final panel of the night, “The Value of Human Relationships in Global Trade,” echoed my own philosophy: success is built on a foundation of trust, integrity, and shared vision.
3. Committing to Excellence
Celebrating the Irvine Global Trade Day Proclamation alongside such distinguished colleagues was a proud moment. It reinforces our commitment at VNARP and Soho SoCal to stay at the cutting edge of global trends so that we can bring the highest level of expertise back to our members and clients.
I am grateful for the opportunity to have participated in such a timely and influential conference. The future of global trade is complex, but with the right connections and a commitment to continuous learning, our community is well-positioned to lead.
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What an incredible day of learning and advocacy! On May 7th, I had the honor of attending the Fair Housing Symposium with OCR on behalf of VNARP.
There is something so energizing about being in a room full of leaders who are all rowing in the same direction toward equity and inclusion. This event reinforced our core mission at VNARP: to foster communities where fairness is the standard and respect is the baseline.
Promoting equitable access isn’t a solo mission; it requires the ‘Quiet Confidence’ to stand up for what’s right and the unwavering integrity to see it through. I am more committed than ever to bringing these insights back to my clients and my team. Together, through education and advocacy, we are creating a future where the doors of opportunity are open to everyone.
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Preparedness for Small Businesses
Outsmart Disaster is your preparedness partner. We guide you step by step through creating a Resiliency Roadmap so you can plan during the calm and bounce back when things get tough. We also provide business preparedness tips and recovery resources.
Together, we can be ready for
any interruptions.
Empowering Small Businesses to Prepare in Blue Skies, and Recover from Gray Skies
Every $1 Invested in Disaster Mitigation Saves $13 in Recovery1
40% of Businesses do not Reopen Immediately After Disasters2
An Additional 25% Close Within 12 Months3
Outsmart Disaster’s
RESILIENCY ROADMAP
helps develop a preparation plan with six simple steps
Recognize Potential Threats: Identify, prioritize, and document risks unique to your business
Establish Clear Communication Channels: Gather contacts, plan communication, and set up emergency alerts
Understand Your Operations: Prioritize processes, document equipment, and secure IT systems.
Hazard Mitigation Planning: Assess building safety, inventory, backups, and safety features
Understand Your Insurance and Finances: Review insurance, plan finances, and explore disaster relief options
Create and Test Emergency Response Plan: Train employees, test plans, and prepare an emergency kit
Certified Trainer Interest Form
Do you work with small businesses and entrepreneurs? Become an Outsmart Disaster Certified Trainer. This program is designed for community-based organizations, chambers, local agencies, and trainers that support small businesses and want to deliver Outsmart Disaster resiliency training in their communities.
Disclaimer
Outsmart Disaster is a disaster awareness campaign that includes a no-cost business continuity training program offered by the California Office of the Small Business Advocate (CalOSBA). CalOSBA employees support the program in a training capacity only. CalOSBA does not make any recommendations or guarantees and assumes no responsibility concerning the activities of participating businesses. Participants, and not CalOSBA, are responsible for all plans created and any actions taken following the Outsmart Disaster training.
References
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Elevating Tradition: Mai Phat Mi Gia 2 Opens Its Doors in Little Saigon
April 11, 2026 marked a truly special milestone — the grand opening of Mai Phat Mi Gia 2, a refined addition to the vibrant culinary landscape of Little Saigon.
I had the privilege of supporting and witnessing the unveiling of a concept that beautifully elevates traditional Chinese Vietnamese cuisine into an upscale dining experience. From the thoughtfully designed ambiance to the artistry in every dish, Mai Phat Mi Gia delivers more than a meal — it offers a sophisticated journey through heritage, flavor, and culture. Every detail reflects intention: the richness of authentic Mi Gia recipes, the balance of presentation and taste, and the warm yet polished hospitality that defines exceptional dining.
To the visionary team behind Mai Phat Mi Gia — congratulations on bringing this elevated experience to life. Your dedication to honoring tradition while refining it for today’s discerning guests is truly inspiring.
If you’re in the heart of Little Saigon and seeking a Vietnamese dining experience that is both authentic and elevated, Mai Phat Mi Gia is a must-visit.
Here’s to a remarkable opening and a future filled with continued excellence.
If you’re in the heart of Little Saigon and seeking a Vietnamese dining experience that is both authentic and elevated, Mai Phat Mi Gia is a must-visit.
Here’s to a remarkable opening and a future filled with continued excellence.
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Based on the NFIB analysis and recent legislative updates for 2026, here is a more detailed and comprehensive breakdown of why healthcare costs are skyrocketing for small businesses and the specific solutions currently being debated in Congress.
The Healthcare Crisis on Main Street: Why Costs Are Suraring and How Congress Can Fix It
For over 40 years, small business owners have consistently ranked the rising cost of health insurance as their number one business concern. Today, the crisis has reached a breaking point: only one in three small businesses can afford to offer health benefits, compared to 96% of large employers. This disparity creates a “competitive disadvantage” that makes it nearly impossible for small firms to recruit and retain top talent.
Here is an in-depth look at the root causes of this crisis and the legislative roadmap for relief.
Part 1: Why Costs Have Skyrocketed
The explosion in healthcare costs isn’t just “inflation”—it is the result of systemic inefficiencies and burdensome mandates that disproportionately affect smaller firms.
- The “Death Spiral” of the Small Group Market: The small group insurance market—where most small firms purchase coverage—is shrinking rapidly. Participation fell by 7.4% in just one year (2022–2023). As healthy groups leave the market for self-insurance or other options, the remaining “risk pool” becomes sicker and more expensive, causing premiums to spike by over 120% for some firms over the last two thập kỷ.
- Burdensome ACA Mandates: Federal regulations like the Essential Health Benefits requirement mandate that all small business plans cover ten specific categories, regardless of whether the employees need them. This “one-size-fits-all” approach eliminated more personalized, affordable plans that small businesses once used to manage costs.
- Lack of Transparency & Middlemen (PBMs): Pharmacy Benefit Managers (PBMs) act as middlemen between drug manufacturers and insurers. They often engage in “spread pricing”—charging the health plan a higher price for a drug than they pay the pharmacy and pocketing the difference. Because PBMs often profit more when drug prices are higher, they have little incentive to lower costs for small employers.
- Hospital Consolidation: Rapid consolidation in the healthcare industry has reduced competition. When large hospital systems buy up independent physician offices, they often add “facility fees” to the bill for the exact same services, driving up the cost of care for small business plans.
Part 2: What Congress Can Do (The 2026 Legislative Roadmap)
The NFIB has recently submitted a 2026 Legislative Health Care Plan to Congress, outlining targeted reforms designed to inject competition and flexibility back into the market.
1. Increase Flexibility with CHOICE Arrangements
Congress is being urged to pass the CHOICE Act, which would codify and expand Health Reimbursement Arrangements (HRAs). These allow employers to provide a tax-preferred contribution that employees can use to buy an individual health plan that fits their specific needs. This removes the administrative burden of managing a group plan from the small business owner.
2. Pass the COMPETE Act (Short-Term Plans)
Small businesses need “bridge” options. The COMPETE Act would extend the maximum duration of Short-Term, Limited-Duration Insurance (STLDI) plans to 12 months (up from the current 3-month restriction) and include a renewal guarantee. These plans are often significantly more affordable than traditional ACA-mandated plans.
3. Level the Playing Field with "Site-Neutral" Payments
Congress can lower costs by implementing site-neutral payment policies. This would ensure that an insurer pays the same rate for a medical service regardless of whether it is performed in a high-cost hospital setting or a local doctor’s office. This simple change would disincentivize hospital consolidation and lower premiums.
4. Ban Spread Pricing and Empower Transparency
To tackle drug costs, the NFIB is pushing for a total ban on spread pricing and requiring PBMs to be fully transparent about rebates. Additionally, the Patients Deserve Price Tags Act would require hospitals to post clear, up-front pricing, allowing small business owners and their employees to “shop” for high-value care just like any other service.
5. Association Health Plans (AHPs)
Small businesses are strongest when they work together. Reforming AHP rules would allow small firms to pool their resources and leverage the same massive purchasing power that large corporations use to negotiate lower rates with insurance carriers.
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The debate over universal healthcare in California has reached a fever pitch with the introduction of Assembly Bill 1900. While the promise of “healthcare for all” sounds appealing in theory, the National Federation of Independent Business (NFIB) and many California small business owners are sounding the alarm. The reality of a government-run, single-payer system is far more complex and costly than its supporters suggest.
Here is a deeper look into the four primary reasons why CalCare is being labeled an “unaffordable plan” for Californians.
1. The Staggering $500 Billion Price Tag
The most immediate concern is the astronomical cost of implementation. Latest estimates place the price of universal single-payer healthcare in California at approximately $500 billion annually.
To put that in perspective, California’s entire state budget for the 2024-2025 fiscal year was roughly $290 billion. CalCare would effectively double the state’s spending overnight. Financing such a massive expansion would require tax increases on a scale never before seen in U.S. history, creating a fiscal burden that could destabilize the state’s economy.
2. The Inefficiency of Government Management
Opponents of AB 1900 point to a “track record of mismanagement” within existing state agencies as a cautionary tale. Small business owners frequently interact with the Employment Development Department (EDD) and the Department of Motor Vehicles (DMV)—two agencies that have struggled with backlogs, fraud, and technological failures.
The NFIB argues that healthcare—literally a matter of life and death—is too vital to be entrusted to a massive new government bureaucracy. There is a deep-seated fear that a government-run system would lead to:
- Longer Wait Times: Similar to other single-payer systems globally, elective and specialized procedures could see significant delays.
- Reduced Innovation: Private sector competition drives medical breakthroughs; a state monopoly could stifle the incentive for new treatments and technologies.
3. A Crushing Tax Burden on Employers
Perhaps the most direct threat to small businesses is the proposed funding mechanism. Since the state cannot print money, the $500 billion must come from California taxpayers. Lawmakers have discussed several aggressive tax hikes to fund CalCare, including:
- Excise Taxes: Direct taxes on business activities.
- Payroll Taxes: Increasing the cost of every employee on the books, which could force small businesses to freeze hiring or reduce staff.
- Personal Income Tax Surcharges: A specific “State Personal Income CalCare Tax” that would target high-earners and business owners who file as individuals.
For a small business owner already operating on thin margins, these additional taxes represent more than just a line item—they are a threat to solvency.
4. Exacerbating an Already Astronomical Cost of Doing Business
California is consistently ranked as one of the most expensive states in the country for business, cited for its high regulations, energy costs, and existing tax rates. NFIB California members emphasize that adding a universal healthcare tax would be the “breaking point” for many “Main Street” shops.
As businesses flee to more tax-friendly states like Texas, Florida, or Nevada, the tax base for those remaining in California shrinks, potentially creating a “death spiral” where taxes must be raised even higher on those who stay to cover the system’s costs.
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Shakedown attorneys find new gold mine on the internet
The lawsuit mill in California never stops turning, whether it’s propelled by shakedowns from miniscule, easily correctible violations of the Americans with Disabilities Act (ADA) or by halts to badly needed housing construction from the California Environmental Quality Act (CEQA).
Now, there’s a new tool for lawyers specializing in pay-up-to-make-it-go-away litigation to use to shake down small business owners—supposed violations of the internet, using a law that was established before the internet came along.
“Companies with websites accessed by California consumers are increasingly facing lawsuits and arbitration demands under the California Invasion of Privacy Act (CIPA), which imposes potential statutory damages of $5,000 per violation,” reports the American Bar Association. “Plaintiffs’ attorneys are leveraging the decades-old CIPA to circumvent the limitations of newer privacy laws, alleging that using website tracking technologies without obtaining user consent infringes on privacy rights.”
A new coalition NFIB is now part of, ReformCIPA, is supporting Senate Bill 690, a bipartisan measure “to curb this economic and community burden by ensuring modern digital practices are governed by modern privacy laws, rather than a statute written decades before the internet existed,” according to a ReformCIPA news release.
“Originally designed in the 1960s to prevent wiretapping, the law is now being exploited by trial lawyers to target organizations over routine website tools, such as chat features and analytics … Organizations, including non-profits are flooded with ‘pay up or get sued’ demand letters, and because fighting these claims in court is often more expensive than settling, many are pressured into paying massive, unjust settlements. These legal shakedowns ultimately function as a hidden tax on consumers.
“With everyday Californians already struggling under the weight of rising housing, energy, food, and healthcare costs, forcing small businesses to spend thousands on legal defense guarantees those financial burdens are passed directly to families that can’t afford these prices.”
Using environmental, disability, and, now, privacy laws to shakedown people who never consciously violated the spirit of any law is a blight on American jurisprudence and needs to be stopped.
Lawsuit abuse is particularly hard on small business owners who often lack the ability to pay up to make the threat of being hauled into court go away. The law firm of Novian & Novian says, “On average, it costs employers around $75,000 to work with an employment lawyer to settle a claim before it reaches trial. However, if the case progresses to court, the expenses can skyrocket, with pre-trial defense costs easily exceeding $125,000.”
See how much easier it is to pay $5,000 to make it all disappear? What an insidious and malignant way to make money.
Want to be part of this campaign? Click here to join the coalition.
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At Soho SoCal, we often talk about “Quiet Confidence”—the peace of mind that comes from having a clear plan and a solid foundation. For many of the business owners in our community, that foundation is currently being tested by growth.
You’ve built something successful. You’re busy. But you’re also starting to feel the weight of doing it all yourself. Whether you are wondering if it’s finally time to hire your first employee or simply looking for the “wisdom” to run your business more effectively, this guide is for you.
Based on the latest industry insights and collective experiences of successful entrepreneurs, here is how you can navigate the next level of your business journey.
Part 1: Is it Time to Hire?
Hiring your first employee is perhaps the most significant “leap” a business owner will take. It transforms you from a practitioner into a leader. Before you post that job description, ask yourself these four critical questions:
1. Can the math support the mission? Hiring isn’t just about a salary. You must factor in payroll taxes, workers’ compensation insurance, equipment (laptops, software licenses), and potential office space. At Soho SoCal, we always advise looking at your “burn rate” before making a commitment.
2. Are you “Working In” or “Working On” your business? If your days are consumed by monotonous tasks that prevent you from high-level strategy, you are hitting a ceiling. Hiring an employee buys you back the most valuable currency in the world: Time.
3. Is your need long-term or project-based? If your workload is fluctuating, consider a freelancer or consultant first. However, if you are looking for consistency and team culture, a full-time hire is the way to go.
4. Can you spare the time to train? Hiring is a front-loaded investment. You will likely be less productive for the first 30 days as you onboard your new team member. Ensure your business can handle that temporary dip for the long-term gain.
Part 2: Lessons from the Trenches
Success leaves clues. Here are seven “Wisdom Keys” from business owners who have successfully scaled their operations:
- Build a Support Network: Don’t lead in isolation. Whether it’s a mastermind group, a business coach, or a community like VNARP, having people to “talk you off the ledge” is vital for mental longevity.
- Be Specific with Goals: Don’t just aim for “more revenue.” Break it down. If you need $100k this quarter, how many clients does that actually represent? Specificity drives action.
- Focus on Your “Best,” Delegate the Rest: Many owners realize too late that they were doing tasks they were actually bad at. Hire people who are smarter than you in specific areas—whether it’s accounting, marketing, or operations.
- Keep Overhead Low: In the age of virtual work, do you really need that expensive office? Lowering overhead isn’t just about saving money; it gives you the “peace of mind” to make better pricing decisions during a recession.
- Find Your Niche: You don’t need to be everything to everyone. Find the “magic” that works for one specific type of client and replicate it.
- Don’t Quit Too Early: Successful founders often keep their “day job” or a secondary income stream until their new venture is truly stable. This reduces the “panic factor” that leads to bad business decisions.
- Avoid the “Second Startup” Distraction: A successful venture requires 100% of your attention. Don’t let a “shiny new idea” derail the engine that is already working.
Part 3: The Soho SoCal Perspective
As your business grows, so does your risk. Scaling is about more than just increasing revenue; it’s about protecting what you’ve built. From ensuring you have the right Workers’ Comp for that first hire to protecting your Commercial Assets, we are here to help you navigate these transitions.
One smart step at a time.
If you’re ready to discuss how to protect your growing team or your expanding business footprint, let’s connect.