Unwrapping Card Fees This Holiday Season

This year is poised to be an expensive holiday season for retailers, who have battled breakneck fee increases over the past three years. Between rising fees, continued growth in the online segment, and complexities associated with new products, digital retailers could be hardest hit.

This holiday season, the National Retail Federation estimates that holiday spending may top $1.01 trillion, growing approximately 3.7% to 4.2% over 2024.¹ CMSPI estimates U.S. retailers will pay card acceptance fees² of over $19.9 billion this holiday period, up from $19 billion in 2024 (Figure 1). To put that cost into perspective, the $19.9 billion represents enough money to pay the estimated 265,000-365,000 seasonal workers hired this year an annual wage of $55,000-$75,000.³

Want to see what share of holiday card costs is forecasted to come from your state? (Figure 2).⁵

State impact figures were calculated by splitting out total fees paid nationally by each state’s share of U.S. GDP for the most recently available year.

More Digital Spend – and Fees – A Hallmark of This Season

U.S. credit card acceptance fees for merchants are some of the highest around the globe.⁷ In fact, data suggests credit cards account for over 72% of total card fees paid by the country’s retailers,⁸ and spending on these cards spikes during the holiday season.⁹ Of the $19.9 billion in merchant card fees forecasted for the period between November and December, credit card fees account for over half.¹⁰

Credit cards, debit cards, and digital wallets account for an estimated 89% of holiday spend. The payment methods represent 3 of the 4 highest cost payment methods in the U.S. Moreover, each of these payment methods have higher costs online than in store.¹¹

As ecommerce spend continues to grow as a share of total spending,¹³ merchants are faced with increased operational costs and complexities when accepting an increasing number of payment methods and payment service providers. Online transaction fee increases in 2026 look to impact merchant amounting to an estimated $400 million.¹⁴ These fee increases only add to the staggering $236 billion in estimated cost U.S. retailers faced in 2024.¹⁵

Furthermore, to demonstrate the extent to which credit card costs are impacting U.S. retailers, if all holiday expenditures this year were performed on credit cards, retailers would be spending an estimated $29 billion in card fees, nearly $10 billion more than the estimate based on the current payments mix.¹⁶

Keeping Costs Down

Given it’s the busiest shopping season for most, the holiday period represents one of the biggest challenges and opportunities for retailers. With the anticipated influx of customers, the results of suboptimal arrangements will be amplified and could even worsen.

With the shift to online shopping during the holidays and the significant card fee cost differential between in-store and online shopping, cost-saving measures are more important than ever. Alongside the shift to online spending, the holiday season also tends to see a spike in Buy Now, Pay Later spending which has come to represent one of the highest cost payment methods in the U.S.¹⁷ and typically cannibalizes debit spending,¹⁸ further inflating retailer costs during the holidays.

As more card fees are introduced, as more spending occurs online, and as more payment methods are used at checkout, the holiday season brings with it an increased level of complexity that can prevent some of the largest merchants from optimally utilizing cost-saving measures, such as CNP least-cost routing and fee audits. For these retailers, the holidays could result in millions in potential savings left unrealized.