Can a state mandate businesses accept cards?

Your Business Credit columnist Elaine Pofeldt
Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of, a website for independent professionals. She writes "Your Business Credit," a weekly column about small business and credit, for

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Question Dear Your Business Credit,
Can a state mandate that all businesses have to accept credit/debit cards as a form of payment or is this against federal law?— Julietta

Answer Dear Julietta,
Interesting question! I ran it past Myriam Gilles, Professor of Law at Cardozo Law School in New York City.

“There is no federal statute that would directly impede a state from enacting a law that mandates credit and debit card acceptance,” Gilles said in an email.

However, Gilles said that she would expect constitutional challenges if a state tried to mandate this.

“Remember how the big Obamacare case turned into a debate over broccoli, which was mentioned 12 times in the decision?” Gilles asked. “To be sure, the issue there was whether Congress could mandate broccoli purchases (or insurance), and the question here concerns state law.  But there has been much debate about whether states could enact this kind of mandate.”

In this case, the state would be forcing merchants to do business with the card networks.  Gilles anticipates that merchants would protest this. “I imagine that objecting merchants would try to force the state to justify its law as a commercial speech restrictions, because the law abridges their rights to free association,” Gilles wrote.

You didn’t say why you are asking this question. Let’s assume you are afraid you might someday be forced to accept credit or debit cards and don’t want to. Based on Gilles’s take on this issue, it sounds like the risk of this happening is fairly low, given the potential for push-back by merchants.

That said, I would suggest you consider both the pros and cons of accepting credit and debit cards thoroughly before ruling them out. Each industry has its own customs when it comes to payment. In some industries, customers may bypass you if you don’t accept credit or debit cards. For instance, not accepting credit cards would be a liability for a gas station or a convenience store and would probably limit its potential revenue. However, there are some benefits to avoiding credit cards, too. It would save you transaction fees and the cost of maintaining a merchant account.

In other industries, few customers expect you to accept credit or debit cards. In my own freelance writing business, for instance, virtually all of my clients pay me by check or electronic funds transfer. In eight years, only one client has requested to pay by credit card, which I enabled through my invoicing software provider with no hassle. Getting myself set up with a merchant account to accept credit cards would not likely be a good investment of time or money. There are many professional services businesses, like mine, where getting set up with a merchant account would not make good financial sense.

It all comes down to knowing your customers and their preferences. One of the top challenges for many small businesses is winning new customers and keeping existing ones coming back. By making it convenient for customers to pay you, you’ll give them one less reason to turn to your competitors.

See related: Card acceptance fees too high? Shop for a new merchant processor, EMV terminal recommendations for small business

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Updated: 03-23-2019