Average Fees for Credit Card Processing

Managing expenses is crucial for any business to thrive. While some costs, like rent and inventory, are easy to comprehend, credit card processing fees can be more complex. Credit card processing fees are necessary for businesses that accept card payments.

These fees vary depending on factors such as the payment processor, transaction type, and business industry. Understanding the average costs can help businesses manage expenses and choose the best processing solution. This guide covers the standard fees associated with credit card transactions and what companies can expect to pay.

What Are Credit Card Processing Charges?

​Credit card processing fees are charges that merchants incur when accepting and processing card payments. These fees encompass various components, primarily the interchange fee, which is set by credit card networks like Visa and MasterCard and paid to the card-issuing bank. Interchange fees vary based on factors such as the type of card used (e.g., standard, rewards, business), the transaction method (e.g., swiped, keyed-in, online), and the merchant’s industry. For instance, transactions involving premium rewards cards or card-not-present scenarios typically attract higher interchange fees due to increased risk. ​

In addition to interchange fees, merchants may also be subject to assessment fees charged by the card networks and payment processor fees, which cover the cost of services provided by payment processors or merchant account providers. These combined charges can significantly impact a merchant’s operating costs, leading some businesses to adjust pricing strategies or implement surcharges to offset expenses. However, such practices are regulated differently across jurisdictions, with some areas prohibiting surcharges to protect consumers. Understanding the structure and components of credit card processing fees is essential for merchants to manage costs effectively and maintain profitability.

What Makes Up the Average Fees for Credit Card Processing?

A common question among merchants is, what are the average fees for credit card processing? Businesses typically incur credit card processing fees ranging from 1.5% to 3.5% of the total transaction amount. For instance, for a $10 sale, these fees would amount to $0.15 to $0.35. This amount charged varies based on factors such as the type of card used and whether the transaction occurs in person or online. Choosing a credit card processing company that offers fees suitable for your business’s sales trends and volume is essential.

Most major credit card brands, Discover, Mastercard, and Visa, publish their rates online. If you have ever seen the number of rates these brands post or a merchant statement, you may have a pretty good idea of how many different variables there are to decide the final rate at the transaction time.

These factors can range from which card type is being used (credit card or debit), the category of the card (corporate, fleet, standard, rewards, etc.), whether it is swiped, or the card is not present (CNP). If it is CNP, then the merchant’s security measures the nature of service purchases (whether the customer is buying coffee or guns), among many others. Some of these fees include:

Interchange Fees

The interchange fee is a payment directly to the card issuer for the swiped transaction. These fees can vary depending on the card type, transaction amount, and industry.

For instance, credit card companies might impose higher interchange fees for online purchases due to the increased risk of fraud associated with such transactions. For example, Citibank will get the interchange fee for a customer credit that Citibank issues for the Mastercard payment network. The table below shows the average credit card interchange fee:

Payment network	Interchange fee
Visa	1.23% to 3.15%
Mastercard	1.15% to 3.15%
American Express	1.10% to 3.15%
Discover	1.56% to 2.4%

This table does not show the extremely high and low interchange fees for each payment network; certain exceptions (like Mastercard’s additional $ rate for credit payments on different transactions) present a more typical fee range.

Discover typically has the narrowest range of credit card processing fees, followed closely by Mastercard and Visa. For most businesses, the processing costs for transactions made with Visa, Mastercard, or Discover cards will be similar.

Historically, American Express has been the costliest network, leading to its acceptance by fewer businesses. However, in 2018, American Express significantly reduced its fees, the largest reduction in 20 years, aligning it more closely with its competitors.

Payment Processing Fees

Several payment processors are available to accept credit card payments. Typically, you’ll need payment processor equipment for physical cards and an online payment gateway for virtual shopping carts. The payment processing company determines your payment processing fees.  These fees can include expenses such as:

• A cost per transaction
• A monthly fee
• Cost for point of sale (POS) terminals used for processing transaction

Assessment Fees

Assessment fees represent charges applied to a credit card processor’s monthly sales volume for handling credit card transactions. These fees are remitted to the card associations and constitute their primary revenue stream. They are alternatively referred to as card brand fees, network access fees, and brand usage fees. Using the above example, Mastercard will get the assessment fee. Here’s a look at the assessment fees by different payment networks:

Payment network	Assessment  fee
Visa	0.14%
Mastercard	0.1375% for the transactions below $1,000, 0.01% for the transactions exceeding $1,000.
American Express	0.15%
Discover	0.13%

Understanding the Different Payment Processor Pricing Models

Payment processors operate using one of four primary pricing structures:

• Flat Rate Pricing:

This model applies a consistent percentage fee alongside a static fee per transaction, for example, 3% + $0.10 for each transaction. Its simplicity and predictability make it appealing; the fee remains unchanged regardless of the credit card type. However, it generally costs more due to the inclusion of variable interchange fees in the overall charge.

• Tiered Pricing:

Tiered or bundled pricing is a fee structure used in credit card processing to determine the charges merchants pay to processing companies for each transaction. This model categorizes fees into three tiers: qualified, mid-qualified, and non-qualified. By allocating risk costs from the credit card networks, the tiered pricing model offers lower rates for qualified transactions and higher rates for non-qualified transactions.

In a tiered pricing model, merchants generally pay fees of 1.5% to 2.9% for transactions where the card is present. For transactions entered manually, the rate is about 3.5%. Transactions where the card is not present often have higher fees.

• Interchange Plus Pricing:

This model calculates fees based on the current interchange rates plus a fixed markup for processing costs, such as 2.1% + $0.10 per transaction. This approach is lauded for transparency, allowing merchants to benefit from lower interchange fees when applicable. Likewise, it requires careful monitoring of transaction categories to anticipate costs accurately, given the variability of interchange rates and additional fees.

• Membership-Based Pricing:

Membership-based pricing is a payment processing model in which businesses pay a monthly fee and interchange rates at the time of the transaction. This approach eliminates the traditional percentage markup for each transaction and is often called a subscription model. For example, instead of a 2.1% + $0.10 fee for every transaction, businesses under this model pay a monthly subscription fee along with the applicable interchange rates during transactions.

The membership-based pricing model offers one of the most transparent fee structures for credit card processor accounts.

What Do Payment Processing Companies Typically Charge?

There are primarily two payment processing fee structures: flat rate and interchange plus. Flat-rate processors apply a consistent fee to each transaction, covering all processing costs. In contrast, interchange-plus processors itemize fees, making it clearer what you’re paying for each component.

Below is a table showing fees from various well-known payment processing companies for both in-person and online transactions, along with their pricing models:

Company	Pricing Structure	Online Transaction Fee	In-Person Transaction Fee
Square	Flat rate	2.9% + $0.30	2.6% + $0.10
Stripe	Flat rate	2.9% + $0.30	2.7% + $0.05
Helcim	Interchange plus	Interchange + 0.5% + $0.25 (for monthly card transactions ≤ $50,000)	Interchange + 0.4% + $0.08 (for monthly card transactions ≤ $50,000)
Finix	Interchange plus and subscription-based	$79/month + Interchange + $0.15	$79/month + Interchange + $0.08
Shopify	Flat rate	2.5%–2.9% + $0.30	2.4%–2.6% + $0.10

Note: For the latest and most relevant rates, it’s recommended to check with each provider directly.

How Often Do Payment Networks Update Interchange Fees, and What Changed in 2025?

Payment networks typically update their interchange fees twice yearly, with new fee schedules released in April and October. This regular, biannual adjustment ensures that the fee structures remain responsive to market conditions, risk assessments, and evolving regulatory standards. While these scheduled updates form the backbone of the fee-setting process, networks sometimes introduce off-cycle modifications when needed to address emerging industry trends or compliance requirements. For instance, Visa and Mastercard have been known to roll out mid-cycle changes when market dynamics demand a more agile response.

In 2025, several notable changes reshaped the interchange fee landscape. Early in the year, networks implemented updates that included adjustments to specific fee components—for example, Visa increased its Misuse of Authorization fee and recalibrated its Digital Commerce Services fee calculation method, now basing it on authorized rather than settled transactions. On the other hand, Mastercard revised its Excessive Authorization Attempts fee, moved to a higher rate, and introduced new pricing structures for specialized programs like wholesale travel transactions. These changes have added layers of complexity to fee structures, requiring merchants and financial institutions to closely monitor and adjust their processing strategies to maintain cost efficiency.

Factors Affecting Interchange Rates

The interchange fee offsets the risks associated with fraud and handling costs for the card issuer. Various risks impact interchange rates.

Card Type

The type of card used, whether credit or debit, impacts interchange rates. Credit cards generally pose higher risks than debit cards with PIN security, resulting in higher interchange rates for credit card transactions. Additionally, debit cards processed with a signature, similar to credit cards, and credit cards offering rewards like travel or cash back may incur higher interchange rates.

Card-Not-Present (CNP) Business Transactions

Merchants who operate businesses dependent on transactions in which the card is not present usually pay a higher interchange fee—1.90% plus a $0.10 transaction fee. Such merchants also have higher software and payment gateway costs and additional security check costs. These generally range from $10 to $15 per month and have a transaction fee of $0.01 to $0.08.

Given the inherent risk of fraud and chargebacks with CNP transactions, which results in more considerable compliance overhead, merchant services processors also charge a higher interchange pass-through markup. All these add up to higher average fees for credit card processing overall.

The Average Ticket Size

The average ticket size significantly contributes to a business’s average fees for credit card processing. The average ticket size is the amount of a typical credit card or debit card transaction. The higher the ticket size, the greater the average fees for credit card processing. As the average ticket size decreases, the transaction fees merchants pay increase. It’s the law of numbers, and transaction fees rack up for every transaction. A merchant generally processes smaller average ticket-size transactions and pays a higher overall processing fee.

An example of two businesses that both process $1,000/ month. Business X has an average ticket size of $10, while Business Y has an average ticket size of $100. This results in Business X having 100 monthly transactions, while Business B has 10 monthly transactions.

Suppose Business X and Y pay the same rates, including a $0.10 transaction cost. Business X will pay $10 monthly fees, while Business Y will pay $1. That is a 10x difference. As a result, merchants with lower average ticket sizes per transaction impose minimums for credit card usage.

Merchant Category

All merchants have a merchant category code (MCC) related to their industry or business type. Payment networks use the MCC to determine the general risk profile and charge pre-determined interchange fees based on the merchants’ MCC. For example, a restaurant will have a different interchange fee than an adult-oriented merchant.

Additional Charges

When you process credit card payments, be aware of these obligatory fees, which are consistent across all payment processing companies:

• Acquirer Processing Fee (APF): This charge, levied by the payment acquirer, covers the costs associated with electronic payment processing. It’s also known as an acquiring fee or a merchant service fee.
• Fixed Acquirer Network Fee (FANF): A monthly charge calculated per merchant taxpayer, covering all of a business’s merchant accounts or locations for credit card processing.
• Kilobyte Access (KB) Fee: A fee for each authorization transaction sent to the card network for settlement. Visa’s rate is $0.0047 and Mastercard’s is $0.0035. Note, however, that your processor might increase this fee.
• Network Access and Brand Usage (NABU) Fee: MasterCard imposes this fee on transactions processed by U.S. merchants involving U.S. cardholders. It covers the costs of using the MasterCard Network and costs $0.02 per transaction.
• Visa International Service Assessment (ISA) Fee: Visa imposes the ISA fee to mitigate the risks of processing cards issued in foreign countries. This fee is charged per transaction and is typically borne by the business accepting the card. Ultimately, increased fees or prices may indirectly transfer the ISA fee to cardholders.

Which Charges Can Be Negotiated?

Knowing that some fees can be negotiated with your payment processor is important for businesses processing credit card payments. Opting for a merchant services provider that offers precise details on their fees is beneficial. Consider negotiating these costs:

• Monthly Subscription Fee: A fixed rate for payment processing services or software access.
• Merchant Account Fee: Costs incurred for the maintenance and use of a merchant account by financial institutions.
• Verification Fee for Address Matching: Charged when utilizing the Address Verification System for transactions without physical cards.
• Fee for Chargebacks: This refers to the refund issued to a debit or credit card after the customer disputes a transaction.
• Early Contract Termination Fee: A charge applied for canceling a merchant account before the contract’s end date.
• Enhanced Discount Rate: An additional fee on top of compulsory interchange rates.
• Monthly Minimum Fee: This fee is charged if the processor’s monthly transaction minimums are not met, regardless of activity.
• Online Payment Gateway Fee: Associated with the costs of software and securing online credit card transactions.
• PCI Standard Maintenance Fee: An extra charge to ensure PCI compliance.
• Operational Service Fee: This is similar to the merchant account fee and is related to managing your payment processing account.
• Paper Statement Fee: This fee is for issuing a paper statement to your business.
• Mobile Processing Fee: The monthly cost for cellular service if transactions are processed wirelessly.
• Equipment Rental Cost for Payment Processing: This refers to businesses’ monthly expenditure when leasing devices necessary for card payment processing.
• Subscription Cost for Cloud-Based Sales System: Businesses pay monthly or annual fees to use cloud-based sales and transaction management systems, which offer flexibility and scalability.
• Group Processing Charge: A fee levied for aggregating and processing multiple transactions within a set period, typically daily.
• Data Hosting Fee: This is the cost associated with hosting data on servers, ensuring that a business’s digital operations, including transactions and payment processing, run smoothly.
• Regulatory Reporting Fee: A charge for services related to compiling and submitting necessary financial and transactional information to comply with IRS mandates.

How Can a Payment Processor Determine Interchange Rates?

Payment processors play a significant role in influencing interchange rates by bargaining with card networks on behalf of merchants. They can sometimes arrange personalized interchange fee structures, considering factors like transaction volume and industry type. Payment processors leverage their connections with financial institutions to secure more favorable rates.

For instance, American Express (AmEx) is notorious for being the “pricey” card to accept. However, the company has worked on changing that reputation over the last few years and has improved its pricing model. A critical difference between AMEX and other payment networks is that AMEX has the largest market share of corporate cards, which incur higher rates than consumer cards.

Merchants generally pay more if they accept American Express cards than other payment networks. The payment processors you use and their pricing model determine whether a merchant pays a lot more or just a little.  Below are Host Merchant Services charge rates on top of AMEX interchange and assessment fees.

Payment processor	Swiped retail transaction rate	Swiped Restaurant transaction rate	E-Commerce
Host Merchant Services	Interchange + 0.25% + $0.10	Interchange + 0.20% + $0.09	Interchange + 0.35% + $0.10

A litany of factors impact the average credit card processing fees. What merchants pay in processing fees is determined by several factors, including the merchant’s industry, type of card, how the merchant accepts cards, and more. Unfortunately, there aren’t any quick and easy answers for this very nuanced subject matter. As spending habits shift towards credit card usage, these fees are increasingly a part of doing business.

A clear and transparent depiction of the average fees for credit card processing can help merchants budget and price their products and services appropriately. Of course, businesses should do everything they can to reduce their processing costs, preferably working with merchant services providers using an interchange-plus pricing model.

Tips to Control Credit Card Processing Fees

Here are strategies for reducing your credit card processing expenses:

• Transfer Credit Card Costs to Customers:

Small enterprises can offset credit card fees by adopting a cash discount scheme or a credit card surcharge policy. A cash discount scheme offers a reduction for cash payments, whereas a surcharge adds a fee to card payments. Both strategies require adherence to specific regulations and guidelines.

• Implement a Minimum Charge for Card Payments:

To mitigate processing fees on small transactions, particularly those below $10, consider setting a minimum charge for credit card payments, as permitted by the Dodd-Frank Act of 2010. Ensure compliance with local laws, which often mandate consistent minimum policies across all payment platforms.

• Reduce Chargeback Incidents:

High chargeback rates can lead to increased processing fees due to the perceived risk. Lowering chargeback rates through credit card authorization forms can help manage this issue. When signed by the customer, such forms facilitate ongoing charges and provide support in chargeback disputes.

• Avoid Flat-Rate Pricing Plans:

While convenient for startups, flat-rate pricing offered by services like PayPal, Square, or Stripe can be costly. Opting for interchange-plus pricing or membership-based models could provide financial savings.

• Revise Your Pricing Strategy:

Slightly increasing the prices of your goods or services can cover credit card processing costs. Assess the impact of these adjustments on consumer demand, as minor price increases may not significantly deter customers.

• Consider Changing Payment Processors:

If negotiations with your current processor falter and your business’s profitability is at stake, switching processors might be beneficial despite the potential inconvenience.

How Do Credit Card Swipe Fees Affect Consumers?

Some retailers add a surcharge to purchases made with a credit card to cover swipe fees. Some stores impose a surcharge on credit card transactions to manage these costs, passing the charge directly to consumers. The National Retail Federation estimates swipe fees cost the average American family more than $1,000 annually through increased prices or direct surcharges.

Supporters of these fees, including major retailers and credit card companies, claim they are necessary to support credit card rewards programs and cover fraud protection costs. However, the legality of imposing credit card surcharges varies by state. As of September 2024, most states permit merchants to apply a surcharge for credit card payments, though some states still ban or limit this practice.

In states like Massachusetts and Connecticut, credit card surcharges remain illegal. A class action lawsuit in 2013 prompted some states to start permitting merchants to charge additional fees to cover processing costs. As Visa and Mastercard prepare for another fee increase, and with legislation to cap swipe fees still being debated in Congress, the issue of credit card swipe fees remains unresolved.

How to Calculate Your Credit Card Processing Fees?

Numerous online calculators are available to help you determine the monthly costs associated with processing credit card payments, considering different transaction rates and payment acceptance methods (such as online or in-store). Suppose you’re considering a specific payment processor. In that case, you can input their charging rates—or an average rate for interchange-plus pricing—into these calculators to estimate your monthly expenses.

Conclusion

Understanding and managing credit card processing fees are vital aspects of financial management for businesses. While these fees may seem intricate, a clear grasp of their components can aid in making informed decisions to optimize costs. Each element contributes to the overall expense, from interchange fees to payment processing and assessment fees.

Payment processors offer various pricing models, each with pros and cons, necessitating careful consideration based on the business’s needs and transaction volume. Negotiating specific fees and implementing strategies like transferring costs to customers or revising pricing can help mitigate expenses. Ultimately, monitoring and controlling credit card processing fees is essential for maintaining profitability and financial stability in today’s increasingly cashless economy.

Frequently Asked Questions