65% of Shoppers Willing to Pay Credit Card Fees to Support Local Small Businesses

New data from Kurv suggests a significant shift in consumer sentiment regarding payment processing costs, revealing that 65% of shoppers are willing to pay convenience fees to support local businesses. For fintech professionals, this indicates that the long-held merchant fear of customer churn due to surcharging may be overstated, particularly among younger demographics.

What was announced

Kurv has released a comprehensive report examining how credit card fees impact small business growth and how consumer behavior is evolving in response to these costs. The findings highlight a growing willingness among the public to absorb transaction fees if it helps a local merchant maintain their margins against national retailers. According to the data, 51% of shoppers would complete their purchase as planned even when faced with a convenience fee, rather than abandoning the transaction.

The report places a specific emphasis on generational divides, noting that Gen Z is leading this behavioral shift. This cohort is 19% more likely than any other generation to pay convenience fees to support small businesses over national chains. Furthermore, Gen Z consumers are 20% more likely to proceed with a purchase as intended when encountering a small fee at the point of sale. Perhaps most significantly for merchants worried about lost sales, only 6% of all consumers surveyed said they would cancel a purchase entirely over a convenience fee. Gen Z is 700% less likely than older generations to walk away from a transaction due to these costs.

With 57% of small businesses identifying inflation as their primary concern, the report suggests that merchants are increasingly looking for ways to protect their bottom lines. The data supports the implementation of dual pricing models as a viable strategy for revenue recovery without risking the customer base.

"Consumers are rooting for local businesses: 65% of shoppers say they're willing to pay a convenience fee to support a local business over a national retailer, and most say they'd complete their purchase as planned (51%) rather than walk away."

Nick Bencivenga, VP of Sales at Kurv.

The companies involved

Kurv is a player in the payments and financial services space, focusing on providing tools that help merchants manage the complexities of modern commerce. The company operates at the intersection of payment processing and financial technology, offering solutions designed to streamline operations for small to medium-sized enterprises (SMEs). While many firms in the sector focus strictly on the technical rails of transaction processing, Kurv has positioned itself as a provider of strategic insights, helping businesses navigate the economic pressures of inflation and rising operational costs.

The company's market position is defined by its focus on merchant empowerment, particularly through digital onboarding and reporting tools. By providing data-driven reports on consumer sentiment, Kurv aims to bridge the gap between merchant anxiety over fees and the reality of consumer loyalty. The firm competes in a crowded merchant services landscape but differentiates itself by advocating for pricing models, such as dual pricing, that allow small businesses to compete more effectively with larger, national retailers who often have more leverage in negotiating interchange rates.

What FF News has reported before

FF News has tracked Kurv’s expansion into both the payments infrastructure and investment sectors. Recently, the company signaled a move into sophisticated financial products with the report Kurv Launches KEO ETF to Deliver Diversified Equity Option Exposure and Weekly Income. On the merchant services side, we covered their efforts to improve the partner experience in Kurv Launches New Agent Portal to Streamline Digital Merchant Onboarding and Residual Reporting. The company has also been bolstering its leadership team to focus on emerging technologies, as seen in our report Kurv Appoints AI and Payments Veteran Mark Alsentzer as Chief Technology Officer.

What this means

This data suggests that the "psychological barrier" of the checkout fee is crumbling, particularly for the next generation of spenders. For years, the payments industry has operated under the assumption that surcharging is a "nuclear option" that destroys customer loyalty. Kurv’s findings flip this narrative, suggesting that transparency about the cost of doing business can actually foster support among Gen Z shoppers who value local ecosystems over corporate efficiency. Traditional ISOs and merchant acquirers should take note: the pressure is now on to provide seamless dual-pricing technology. If merchants realize that 94% of their customers won't leave over a fee, the adoption of surcharge-heavy models will likely accelerate, putting traditional "free" processing models under significant strain.