What are Credit Card Processing Fees?
Credit card processing fees represent the total costs charged by card networks, banks, and processors to handle a transaction. In the United States, these fees typically range from 1.5% to 3.5% per transaction, plus fixed per-transaction charges of $0.10 to $0.30.
These fees are comprised of three primary components:
- Interchange Fees: The largest portion of the cost, paid to the card-issuing bank. These generally range from 1.5% to 3.5% and vary based on card type and transaction method.
- Assessment Fees: Non-negotiable fees paid directly to card networks like Visa or Mastercard. These typically range from 0.13% to 0.15% of sales volume.
- Processor Markup: The spread charged by the processing company above the interchange rate. This usually includes a percentage (0.5% to 1%) and fixed per-transaction fees ($0.10 to $0.30).
Total monthly costs can be calculated by multiplying your transaction volume by your processing rate and adding fixed monthly costs such as statement fees, PCI compliance, and hardware costs. Factors such as the industry, transaction method (swiped vs. keyed), and the use of rewards cards significantly influence the final rates.
Related FAQs
-
Do Merchant Services Providers Offer Free Pos Hardware for Small Businesses?
Read More »: Do Merchant Services Providers Offer Free Pos Hardware for Small Businesses?Yes, some merchant services providers do offer free point of sale hardware for small businesses. For example, POS Brokers offers free hardware placements specifically for Clover systems to merchants who meet certain eligibility requirements. Eligibility for these hardware perks is…
-
What is a Cash Discount Program with a Merchant Services Provider?
Read More »: What is a Cash Discount Program with a Merchant Services Provider?A cash discount program is a payment solution that allows business owners to offset their credit card processing costs. With this program, the business displays a cash price for its goods or services. When a customer chooses to pay with…
-
What is the Difference between a Merchant Services Provider and a Payment Processor?
Read More »: What is the Difference between a Merchant Services Provider and a Payment Processor?A merchant services provider delivers a comprehensive, end-to-end payment solution. This includes supplying POS hardware like terminals and card readers, setting up and underwriting merchant accounts, providing ongoing support, and offering transparent pricing models. They act as a full-service partner…
-
Can a Merchant Services Provider Help Me Accept Credit Cards Online and In-store?
Read More »: Can a Merchant Services Provider Help Me Accept Credit Cards Online and In-store?Yes, a merchant services provider can help you accept credit cards both online and in-store. These providers deliver end-to-end payment acceptance, which includes supplying necessary hardware such as POS terminals, card readers, and accessories for physical locations, as well as…
-
How do I Switch Merchant Services Providers without Downtime?
Read More »: How do I Switch Merchant Services Providers without Downtime?To switch merchant services providers without experiencing downtime, follow this migration checklist: Sign your new merchant agreement to have your account configured and assigned a dedicated support contact. Request the porting of compatible terminals; if you are currently using eligible…
