Credit Card Processing Fees - A Detailed Guide

 As a business owner, you're always looking for ways to save money. And when it comes to credit card processing fees, every little bit counts.


But understanding these fees can be confusing. What are they all for? And how can you make sure you're not paying more than you have to?


In this guide, we'll break down everything you need to know about credit card processing fees. We'll explain the different types of fees, how they're calculated, and how you can save money on them.



By the end, you'll be an expert on credit card processing fees and be able to make smart decisions for your business.


Let's get started!

What are credit card processing fees?

Credit card processing fees are the charges you pay to process credit and debit card payments. These fees can be divided into two categories: interchange fees and assessments.


Interchange fees are set by the credit card companies (Visa, Mastercard, etc.) and go to the banks that issue the cards. Assessments are set by the card associations (Visa, Mastercard, etc.) and go to cover the costs of running the card networks.


Both interchange and assessment fees are passed on to businesses in the form of processing fees. And those processing fees can add up!


On average, businesses pay 2.5% - 3.5% of each transaction in credit card processing fees. So, if you're processing $1,000 in sales per day, you could be paying up to $35 in fees.


That's why it's so important to understand how these fees work and how you can save money on them. Let's take a closer look.

How are credit card processing fees calculated?

Interchange fees are based on the type of card being used, the transaction amount, and whether it's a credit or debit card. Assessments are a set percentage of the interchange fee and are generally around 0.11% - 0.15%.


Both interchange and assessment fees are included in the total processing fee you pay. So, if you're being charged 2.9% + $0.30 per transaction, that means your interchange fee is 2.75% and your assessment fee is 0.15%.


Now that you know how these fees are calculated, let's look at the different types of fees you might see on your statement.

What are the different types of credit card processing fees?

There are four main types of credit card processing fees: interchange fees, assessment fees, processor markup, and other fees.


  • Interchange Fees: As we mentioned earlier, interchange fees are set by the credit card companies and go to the banks that issue the cards. These fees are based on the type of card being used, the transaction amount, and whether it's a credit or debit card.

  • Assessment Fees: Assessment fees are set by the card associations and go to cover the costs of running the card networks. These fees are a set percentage of the interchange fee and are generally around 0.11% - 0.15%.

  • Processor Markup: Processor markup is the fee charged by your credit card processor for processing the transaction. This fee is typically a percentage of the total transaction, plus a per-transaction fee.

  • Other Fees: There are also a few other miscellaneous fees that you might see on your statement, such as monthly fees, statement fees, and chargeback fees.


Now that you know the different types of fees, let's look at how you can save money on them.

How to save money on credit card processing fees?

There are a few ways you can save money on credit card processing fees:


  • Get a flat-rate pricing plan: A flat-rate pricing plan charges a single, fixed fee for all credit and debit card transactions. This can be a good option if you have a high volume of sales or process a lot of small transactions.

  • Negotiate with your processor: If you're not happy with the fees you're currently paying, reach out to your processor and try to negotiate a better rate.

  • Choose the right credit card processor: Not all credit card processors are created equal. Some charge higher rates than others. So, it's important to do your research and choose a processor that offers competitive rates.

We hope this guide has helped you better understand credit card processing fees and how you can save money on them. If you have any questions, feel free to reach out to us. We're always happy to help!

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