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.
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