What Are Credit Card Processing Fees and Costs?

In order to provide merchants with a credit card processing service, payment processors charge a variety of fees. These can include account setup fees, statement fees, batch fees, and per-transaction fees. In addition, payment processors also levy a cost for each credit card transaction they process. This fee is known as the interchange fee and is set by the credit card networks.

The total cost of using a payment processor can be substantial. For example, consider a business that processes $10,000 in credit card transactions per month. If the business were to use a payment processor that charges a 2% account setup fee, a $0.50 batch fee, and a 1.5% per-transaction fee, the total cost for using the payment processor would be $240 per month. This would amount to a total cost of $2,880 over the course of a year.

While the use of a payment processor can be expensive, there are a number of ways to reduce these costs. For example, businesses can negotiate a lower per-transaction fee with their payment processor. Alternatively, businesses can switch to a payment processor that charges a lower account setup fee or no batch fees.

When choosing a payment processor, it is important to understand the various fees and costs that are associated with using the service. By understanding these costs, businesses can make informed decisions about which payment processor is best suited for their needs.