Why Hawaiʻi Merchants Pay More Than the Mainland

Running a small business in Hawaiʻi comes with unique challenges — shipping costs, labor constraints, and a heavy dependence on tourism. But one of the most overlooked costs is also one of the most consistent: payment fees.

Most merchants accept credit and debit cards that charge between 2–3.5% per transaction, plus fixed fees, chargeback risk, and delayed settlement. Over time, these costs quietly remove thousands — or even millions — of dollars from the local economy.

Where Do These Fees Go?

The majority of payment fees don’t stay in Hawaiʻi.

They flow to:

• Mainland banks

• Card networks

• Payment processors

• Intermediaries layered into legacy payment rails

This creates ongoing economic leakage, where local businesses work hard to earn revenue that ultimately leaves the islands.

Settlement Delays Hurt Cash Flow

Beyond fees, timing matters.

Traditional card and ACH systems often settle in 1–3 business days. For small businesses, that delay affects:

• Payroll timing

• Inventory restocking

• Vendor payments

• Day-to-day cash management

When margins are tight, access to revenue matters just as much as how much revenue you earn.

Why the System Hasn’t Changed Much

Most payment infrastructure was designed decades ago — optimized for large banks and national networks, not island economies.

That doesn’t mean it’s broken. But it does mean:

• Fees are opaque

• Settlement is slow

• Merchants have little control

• Innovation moves slowly

A New Approach to Payments

New payment systems are emerging that focus on payments only — not lending, speculation, or complex financial products.

The goal isn’t to replace banks or card networks overnight. It’s to give merchants additional options that can:

• Reduce unnecessary intermediaries

• Improve settlement speed

• Increase transparency

• Keep more value circulating locally

What This Means for Hawaiʻi Businesses

When merchants retain more of each dollar earned:

• Businesses become more resilient

• Local hiring increases

• Communities benefit from reinvestment

Modernizing payment rails is about strengthening Hawaiʻi’s economy — one transaction at a time.

What’s Next

USD Hawaiʻi is rolling out in phases, starting with early access for local merchants. Participation is optional, transparent, and designed to work alongside existing payment systems.

Merchants who join early help shape how modern payments evolve in Hawaiʻi.

Join the merchant waitlist to learn more.