If you’ve ever held a personal rewards credit card, chances are you’ve been targeted with an offer to upgrade or apply for a business card— even if you don’t own a business. These offers are becoming increasingly aggressive, and there’s a clear financial reason behind it:

Card issuers are systematically pushing business credit cards because they generate higher interchange fees from merchants.

Just today, I received an enticing offer from Southwest and Chase, promising 80,000 Rapid Rewards miles for opening a Southwest business credit card. Beyond the initial sign-up bonus, the ongoing rewards made the card even more attractive:

• 4x points on Southwest purchases

• 2x points on merchants that cater to businesses

• An additional 9,000 anniversary points each year

As a consumer, this seems like a fantastic deal—better rewards, more perks, and larger sign-up bonuses. However, behind the scenes, issuers and networks are shifting costs onto merchants, erasing the benefits of past regulatory efforts like the Durbin Amendment.

Durbin’s Impact Has Been Erased

When the Durbin Amendment was passed in 2011, it was designed to lower merchants’ overall processing costs—particularly by capping debit card interchange rates. Initially, this led to a significant drop in the effective rate that merchants pay for accepting cards across all channels and card types.

However, over the past decade, issuers and networks have found ways to recapture lost interchange revenue.

A major driver of this? The aggressive conversion of regular credit card users into high-cost business and rewards cardholders.

The Data: How Issuers Have Raised Costs

Our team analyzed 122 million transactions totaling $35.7 billion in sales from 2022 to 2025, covering six major issuers:

• Bank of America

• Capital One

• Citibank

• JPMorgan Chase

• US Bank

• Wells Fargo

Key findings show:

• The effective rate merchants pay is nearly back to pre-Durbin levels due to interchange creep.

• Business cards, which have interchange rates of 2.65%–3.00%, are being pushed heavily to consumers who don’t actually run businesses.

• Chase reclassified 6% of its consumer cards into “Signature Preferred” on January 1st, 2025, raising interchange fees.

• Wells Fargo saw a 55% increase in the highest-cost Business Tier 5 card transactions since Q1 2023.

• Card type shift has increased average merchant credit card costs by 4 BPS since 2022 (~2% increase to acceptance)

• For every $1 billion processed, merchants are now paying an additional $400,000 in fees compared to 2022.

All of this has been accomplished by issuers behind the scenes with no actual changes to published Network Interchange Rates.

How Issuers Are Systematically Pushing Up Interchange

Historically, business credit cards were meant for true commercial transactions—large B2B purchases with formal invoicing, purchase orders, and tax documentation.

But today, issuers aggressively market business cards to everyday consumers who don’t have actual business expenses. The problem?

Regular consumers don’t make purchases in a way that allows merchants to qualify for lower business card interchange rates.

This creates a double bind for merchants:

• They pay higher business card interchange fees.

• They don’t (or simply can’t) submit data necessary to qualify for interchange discounts.

Issuers get a massive revenue boost with no downside by enticing new customers with greater and greater benefits and passing on the cost to deliver those benefits to merchants. Back to my Southwest offer, the everyday merchants I shop at pay for the points and subsequent free flights I will take.

Visa’s New Commercial Enhanced Data Program (CEDP): Another Catch for Merchants

Visa is also making changes to Level 2 and Level 3 interchange qualifications, which previously allowed merchants to qualify for lower interchange rates by submitting additional transaction details.

What’s Changing?

1. Level 2 data is being eliminated, consolidating everything under Level 3.
2. Visa is introducing a new “Commercial Enhanced Data Program” (CEDP) in the U.S.
3. Merchants can still qualify for lower interchange rates if they submit Level 3 data.
4. But Visa is now charging a 0.05% per transaction participation fee.

This means that even when merchants do qualify for lower rates, Visa is now taking a cut.

For businesses that currently don’t pass Level 3 data or are not eligible (like T&E), these changes just ensure that more transactions default to higher rates.

The Harsh Reality: Regulators Won’t Save Merchants

It’s highly unlikely that regulators will step in to address this issue.

• The current administration is rolling back oversight across multiple sectors.

• Federal agencies tasked with monitoring financial regulations are being downsized or deprioritized.

• Even if regulators did act, it would take years to implement new policies, and by then, issuers would have found new ways to increase fees.

Merchants are in the driver’s seat when managing and reducing interchange costs. Optimized Payments is available to ride shotgun and help navigate this situation.

Key Considerations for Merchants

As these shifts accelerate, merchants need to take control of their own interchange strategies. Here are four critical areas to focus on:

1. Monitor Interchange Rate Trends

• Track your blended interchange rate and look for increases tied to card reclassifications.

• If you see more business card volume without a change in customer demographics, issuers are likely shifting consumers into business products.

2. Understand the Limits of Level 3 Data

• If your business doesn’t collect invoice-level data, you cannot qualify for Visa’s new CEDP program.

• Restaurants, travel, entertainment, and most retailers will struggle to benefit from these changes.

3. Adjust Your Acceptance Strategy Where Possible

• Some merchants are experimenting with surcharging, minimum purchase amounts for credit card transactions, or steering toward lower-cost payment methods.

• Debit routing optimization remains an area where businesses can reduce costs, particularly for in-person transactions.

4. Work With Processors That Offer Real Interchange Optimization

• Not all payment processors pass through true interchange savings—make sure yours is transparent about rates and optimizations.

• Consider working with payment providers that offer real-time interchange qualification monitoring to help mitigate rising costs.

Final Thoughts: Merchants Must Take Control

The business card upsell isn’t about better rewards—it’s about increasing interchange revenue.

Issuers have systematically erased Durbin’s impact, reclassified consumer cards, and made it harder for merchants to access lower interchange rates. Now, Visa’s CEDP program adds even more friction, ensuring that even discount programs come with new fees.

Regulators won’t step in to fix this. Merchants are fully in the driver’s seat for managing their own interchange costs.

At this point, the best thing businesses can do is:

• Monitor your transaction mix for shifting interchange rates.
• Evaluate your ability to capture Level 3 data (if applicable).
• Partner with a processor that prioritized interchange optimization.
  

Optimized Payments combines a team of expert consultants with a powerful analytics suite to track and quantify a merchant’s savings opportunities. By making practical adjustments to card acceptance and processing, we can help reduce your effective rate. There’s a clear path to combating these costs.

One thing is certain: The trend toward higher-cost business cards and hidden interchange increases isn’t stopping anytime soon. Merchants must take action—or risk continuing to absorb rising fees.