Accepting credit cards comes with various fees that businesses must account for, primarily due to processing charges by card networks, issuing banks, and payment processors. In 2024, average costs typically range between 1.5% and 3.5% of each transaction, depending on the transaction type, payment processor, and risk factors involved.
Breakdown of Credit Card Processing Fees
| Fee Type | Average Range per Transaction |
|---|---|
| Interchange Fees | 1.5% – 3.5% of transaction + $0.05 – $0.10 |
| Assessment Fees | 0.13% – 0.15% |
| Payment Processor Markup | Varies (typically 0.5% – 1%) |
- Interchange Fees: These fees go to the card-issuing banks and are the largest portion of the cost. Interchange fees average 1.5% – 3.5% of the transaction amount for major networks like Visa, Mastercard, and American Express, with higher rates applied for online or “card-not-present” transactions, which have greater risk
- Assessment Fees: Paid to the card networks themselves (Visa, Mastercard, etc.), assessment fees are typically a small percentage, between 0.13% and 0.15% of the transaction total
- Payment Processor Markup: This is the additional charge by the payment processor and can vary based on your provider and pricing model. Flat-rate processors, such as Square and PayPal, charge a straightforward rate (often 2.6% + $0.10 for card-present transactions), while interchange-plus pricing includes a variable markup, which may range from 0.5% to 1% or more
Typical Monthly and Additional Fees
Many providers also add monthly service fees, PCI compliance fees, and potential chargeback fees:
- Monthly Fees: Commonly range from $10 to $50 depending on the provider and level of service.
- Chargeback Fees: Typically $15 to $25 per chargeback to cover the cost of handling disputes.
Popular Payment Processing Providers and Costs
Some leading providers include:
- Square: Charges a flat 2.6% + $0.10 for card-present transactions, making it popular among small businesses.
- Stripe and PayPal: Both charge around 2.9% + $0.30 for online payments, ideal for ecommerce.
To lower costs, consider options like negotiating with providers, choosing a pricing structure that aligns with your transaction volume, or using platforms that offer competitive flat rates. Comparing providers and pricing models can lead to significant savings, especially for businesses processing high transaction volumes.
For a deeper dive into processing fees and tips for managing costs, check out resources like Merchant Maverick and NerdWallet for comparisons of top providers and fee breakdowns.
