What are credit card processing fees?

Processing fees are charges applied every time a customer pays with a credit or debit card. They include interchange fees set by card networks, assessment fees, and processor markup.

How can I understand my processing fees better?

A savings audit breaks down your processing fees line by line, showing you exactly what you're paying for interchange, assessments, and processor markup.

How Credit Card Processing Fees Really Work

Q: What are interchange fees?

Interchange fees are set by card networks like Visa and Mastercard. These fees are paid to the bank that issued the customer's card and make up the base cost of accepting card payments. They are non-negotiable.

Q: What is processor markup?

Processor markup is the fee charged by your payment processor on top of interchange fees. Unlike interchange, processor markup is negotiable and varies widely between providers.

Every time a customer pays with a credit or debit card, fees are applied to the transaction. While most business owners know these fees exist, very few understand how they are calculated or why they vary so widely. This page explains how credit card processing fees actually work in clear, practical terms.

What are interchange fees?

Interchange fees are set by the card networks such as Visa and Mastercard. These fees are paid to the bank that issued the customer’s card and make up the base cost of accepting card payments.

Interchange rates vary based on:

Card type (rewards cards typically cost more)
How the card is accepted (swiped, tapped, keyed, or online)
Business type and risk category

Interchange fees are not negotiable. Every processor pays the same interchange rates.

What is processor markup?

Processor markup is the portion added by your merchant services provider on top of interchange. This is where pricing differences and overcharging typically occur.

Markup may appear as:

A flat percentage
A per-transaction fee
Monthly service fees

Why merchant statements are difficult to read

Most processing statements are intentionally complex. They often contain dozens of line items, unclear descriptions, and bundled charges that make it difficult to calculate your true cost. Understanding how to interpret each section can help you identify overcharges.

Why many businesses overpay

Businesses often overpay because they never see a clear breakdown of their effective rate or because pricing structures hide real costs.

Want clarity on your own fees?

A savings audit shows exactly what you are paying and whether lower pricing is possible. Get a complete fee breakdown with a free audit.