Credit Card Processing

Credit Card Processing Fees & Rates

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Credit card processing fees seem complicated. But take away the sales jargon and it makes more sense.

In this article I’ll explain the different aspects that contribute to credit card processing fees to give you a solid understanding of who’s charging what and which areas of cost you can control.


After I lay the groundwork, I’ll outline exactly how to get the lowest credit card processing rates for your business, keeping in mind that every quote delivered through CardFellow’s marketplace has a complete cost breakdown.

Each quote that you receive here at CardFellow comes complete with a credit card processing cost analysis that gives a comprehensive breakdown of fees and costs. It’s important to understand what each fee is and where it comes from, but the work of calculating costs for your business will be done by our software.

Compare credit card processors instantly and save.

If you haven’t already done so, sign up for a free account here at CardFellow to receive competitive quotes instantly from leading processors. Our service is completely free and 100% private.

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Components of Cost

Even if you use CardFellow’s easy free service that virtually finds the best credit card processor for you, you should still understand one very important point, which is:

Not all credit card processing fees are negotiable.

The rate that you pay to process a credit card transaction is a combination of base costs and markups called merchant discount. Think of merchant discount as the retail price of credit card processing, base costs as raw material expenses and the markup as production costs.

Base costs should account for the largest portion of expense (about 75% – 80%) followed by the markup (about 20% – 25%). With that said, we help a lot of businesses here at CardFellow that are getting hosed by their current processor, and their base costs are about equal to the markup they’re paying. In cases like this there’s a lot of room for savings. Jump down to the Cost Distribution section below to learn more about where your money goes.

Base Credit Card Processing Fees

Base credit card processing fees are made up of interchange and assessments, and they’re the same for all processors. No processor can give you a lower rate or a better deal on base costs. For example, First Data (the largest credit card processor) pays the same interchange fees and assessments as a small local bank.

Interchange

Interchange accounts for the largest portion of credit card processing expense and it’s paid to card-issuing banks. Believe it or not, your processor and the card brands (Visa, MasterCard, and Discover) don’t see any revenue from interchange.

Here’s the short story of interchange…

The stakeholders of Visa, MasterCard and Discover (the banks) get together and decide how much they want to charge when you accept their credit cards.

The banks consider things like processing method (swiped, keyed, e-commerce), card type (rewards, business, consumer), your business type (merchant category code), and a host of other variables to create a long, exhausting list of interchange fees.

Interchange fees are assessed net of refunds and chargebacks, and most are two parts consisting of a percentage and a transaction fee. For example, 1.51% plus $0.10 is the current Visa interchange fee for a swiped consumer credit card.

It’s important to note that even though interchange rates don’t vary among processors, it is possible to optimize interchange charges to achieve lower costs. Check out our information on interchange fees for more details on interchange optimization.

Assessments

Visa, MasterCard and Discover make money by charging assessments on every transaction involving one of their credit cards. Like interchange, assessments are exactly the same for all credit card processors and no processor can give you a lower rate or a better deal on assessments.

However, assessments may be charged differently if you have a bundled pricing model. Reason being is that your processor has more control to manipulate pricing on a bundled pricing system.

The assessments for each card brand are listed below along with the details about when they apply. Assessments are changed periodically by the card brands, and this list is updated as changes are announced.

Clarification of Terms: The only true assessment fee from each card brand is the percentage charge applied to volume. The various other fees such as network access, foreign handling, and so forth are charges incurred through processing behavior at the individual transaction level. I refer to card brand charges collectively as assessments because these charges are consistent for all businesses.

Assessment fees accurate as of January 2018.

Visa

Debit Assessment
Also called Visa US Acquirer Service Fee – Debit 
This assessment applies to all Visa debit transactions.
0.13%
Credit Assessment
Also called Visa US Acquirer Service Fee – Credit 
This assessment applies to all Visa credit transactions.
0.13%
Acquirer Processing Fee (APF) – Credit
Also called Visa Authorization Processing Fee – Variable Credit 
The Acquirer Processing Fee applies to all U.S.-based credit card authorizations acquired in the U.S. regardless of where the issuer/cardholder is located. If your business is based in the U.S., the acquirer processing fee will apply to all Visa credit card authorizations.
$0.0195
Acquirer Processing Fee (APF) – Debit
Also called Visa Authorization Processing Fee – Variable Debit 
This fee applies to all Visa non-PIN debit authorizations acquired in the U.S.
$0.0155
Credit Voucher Fee – Credit
This fee applies to refund transactions involving a credit card.
$0.0195
Credit Voucher Fee – Debit
This fee applies to refund transactions involving a debit card.
$0.0155
Base II Credit Voucher Fee (Credit)
The Base II Credit Voucher Fee applies to all U.S.-based refund transactions involving a credit card.
$0.0195
Base II Credit Voucher Fee (Debit)
The Base II Credit Voucher Fee applies to all U.S.-based refund transactions involving a debit card.
$0.0155
System File Transmission Fee
Also called Visa Base II System File Transmission Fee 
System File Transmission Fee applies to all Visa transactions and is charged in addition to other transaction-based assessments, such as the Acquirer Processing Fee.
$0.0018
Transaction Integrity Fee (TIF) 
Also called Visa Debit Integrity Fee This fee applies to transactions involving Visa non-PIN debit and prepaid cards that do not meet CPS requirements.
 $0.10
Fixed Acquirer Network Fee (FANF)

FANF is a monthly fee that varies based on processing method, number of locations and volume.
Varies
Settlement Network Access FeeAlso called Visa Base II Fee

Applies to all U.S.-based settlement transactions. If your business is based in the U.S., the settlement network access fee will apply to all Visa settlement transactions.Note:The Settlement Network Access Fee (Visa Base II Fee) and Acquirer Processing Fee will both apply to the vast majority of credit card transactions for U.S.-based businesses.
$0.0025
Kilobyte (KB) Access Fee Visa’s kilobyte fee is charged on each authorization transaction submitted to Visa’s network for settlement.$0.0047
Misuse of Authorization Fee
The Misuse of Authorization Fee applies to Visa authorizations that are not followed by a matching clearing transaction (or in the case of a cancelled or timed out authorization, not properly reversed).
$0.09
Zero Floor Limit Fee
Visa’s Zero Floor Limit applies to cleared transactions that can’t be matched to a previously approved or partially-approved authorization. In short, it applies to settlement transactions submitted without a proper authorization.
$0.20
Zero Dollar Verification Fee
The Zero Dollar Verification fee applies to Zero Dollar Verification messages (approved and declined). Zero Dollar Verification messages include the verification of the card account number, address verification (through AVS), Card Verification Value 2 (CVV2) and Single Message System (SMS) acquired Account Verification authorizations. The Visa Misuse of Authorization Fee does not apply to these requests. The fee applies when you want to verify a cardholder’s information without actually authorizing an amount of their card.
$0.025
International Service Assessment Fee (ISA)
The International Service Assessment Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S.
0.80%
International Acquirer Fee
The International Acquirer Fee applies under the same circumstances as the International Service Assessment Fee noted above.Note: The International Service Assessment Fee and International Acquirer Fee often both apply to the same transaction bringing the total charge to 0.85%.
0.45%

Mastercard

Acquirer Brand Volume This assessment applies to Mastercard transactions less than or equal to $1,000.0.13%
Acquirer Brand Volume – Credit Transactions Greater than $1,000 This assessment applies to Mastercard credit sale transactions greater than $1,000.0.14%
Acquirer Brand Volume – Debit Transactions Greater than $1,000 This assessment applies to Mastercard debit sale transactions greater than $1,000.0.13%
Digital Enablement Fee This fee applies to all Mastercard card-not-present sale transactions.0.01%
Cross Border Fee The fee applies to transactions where the merchant’s home country is different than the country where the card was used. This fee may be combined with the Global Acquirer Program Support Fee.0.60%
Global Acquirer Program Support Fee This fee applies to transactions for U.S. merchants by cards issued outside the U.S. This fee may be combined with the Cross Border Fee.0.85%
Network Access Brand Usage Fee (NABU) This fee is assessed on each authorization record for U.S. merchants for U.S. cardholders.$0.0195
Acquirer License Fee This fee is assessed on a business’s gross MasterCard processing volume. This fee varies per acquirer based on MasterCard’s assessed charge as it’s distributed across the acquirer’s portfolio of merchants. Generally, the ALF fee is a fraction of a basis point. For example, 0.0045%, 0.0075%, etc. are example of a likely ALF fee. This fee is also referred to by several processors as a License Volume Fee.Varies
Processing Integrity Fee: Card Present, Card-Not-Present, No Reversal
The Processing Integrity Fee will apply in the following instances:

  • Card-present: Transactions are not settled, cleared, or reversed within 24 hours of the original authorization transaction/request
  • Card-not-present: Transactions are not settled, cleared, or reversed within 72 hours of the original authorization transaction/request
  • No reversal: An authorization transaction cannot be matched to a corresponding settlement record after a period of 120 days
  • Exempt merchants: Travel and entertainment merchants classified as MCC 3351-3441, 3501-3999, 4411, 7011 and 7512 are exempt from the Processing Integrity Fee
$0.055
Processing Integrity Fee: Pre-Authorization and Undefined Authorization MasterCard has updated its definition of an authorization from a single type to three separate types that are pre-auth, undefined-auth, and final auth. As of May 28, 2017, a pre-auth or undefined auth that is not properly cleared or reversed will incur a fee of $0.045.

A pre-authorization is an authorization that is not fully reversed or cleared within 30 calendar days of the authorization date.

An undefined authorization is one that is not fully reversed or cleared within 7 calendar days of the authorization date.

 $0.045
Processing Integrity Fee: Final Authorization Transactions that do not meet final authorization standards will be assessed this penalty fee.

The final authorization integrity fee applies to authorizations that are not fully reversed or cleared within 7 calendar days of the authorization date, or to authorizations where the authorized amount does not equal the final clearing amount, or to authorizations where the authorized currency code does not match the clearing currency code.

0.25%

Min. $0.04

Address Verification Fee – Card-Not-Present MasterCard charges a fee each time a merchant access the address verification service when processing a transaction. MasterCard’s AVS fee is a little higher for card-not-present merchants than it is for card-present merchants.$0.01
Address Verification Fee – Card-Present MasterCard charges a fee each time a merchant access the address verification service when processing a transaction.$0.005
Account Status Inquiry Service Fee – Interregional The account status inquiry fee is charged for transactions where a merchant does actually authorize an amount on a cardholder’s account, but instead, validates aspects of her account. The interregional assessment is charged when the cardholder and merchant are not in the same region.

Account status inquiry transactions may include requests for address verification service (AVS), card validation code (CVC2), or both. MasterCard implemented the account status inquiry service on June, 14 2011 in place of support for AVS-only transactions.

$0.03
Account Status Inquiry Service Fee – Intraregional The account status inquiry fee is charged for transactions where a merchant does actually authorize an amount on a cardholder’s account, but instead, validates aspects of her account. The intraregional assessment is charged when the cardholder and merchant are in the same region.

Account status inquiry transactions may include requests for address verification service (AVS), card validation code (CVC2), or both. MasterCard implemented the account status inquiry service on June, 14 2011 in place of support for AVS-only transactions.

$0.025
Merchant Location Fee The Merchant Location Fee is billed annually at a rate of $15 per location. Payment facilitators will incur a Merchant Location Fee of $3 per merchant location.$15 / $3

Discover

Assessment The assessment applies to gross Discover card transaction volume.
Note: In April 2016, Discover’s assessment increased from 0.11% to 0.13%.
Note: In April 2015, Discover’s assessment increased from 0.105% to 0.11%.
0.13%
Data Usage Fee The Data Usage Fee applies to all U.S.-based authorization transactions.$0.0195
Network Authorization Fee This fee will applies to all Discover network authorizations and will replace the previously assessed Data Transmission Fee, which applied only to settled Discover transactions. The amount of the Network Authorization Fee and the Data Transmission Fee are the same, but the Network Authorization Fee will apply to a greater number of transactions.$0.0025
International Processing Fee The International Service Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S..55%
International Service Fee The International Service Fee applies under the same circumstances as the International Processing Fee noted above.
Note: The International Processing Fee and the International Service Fee often both apply to the same transaction bringing the total charge to 0.95%. This total will be 1.35% on and after April 15, 2016.
0.80%

American Express

The advent of American Express’s Amex OptBlue introduced in early 2015 allows us to start listing Amex pricing on this page, as well. Like card brand charges for Visa, MasterCard and Discover, the charges listed below are paid to American Express.
Assessment / Sponsorship Fee
The assessment applies to gross American Express card volume.
0.15%
Card-Not-Present (CNP) Surcharge
The American Express card-not-present surcharge applies to gross card-not-present volume, such as keyed and e-commerce transactions. The CNP surcharge is charged in addition to to the sponsorship fee of 0.15%, making Amex’s total assessment on card-not-present volume 0.45%.
0.30%<
International Assessment
The American Express international assessment applies to gross sales volume involving a card issued outside of the United States.
0.40%

Markups

The markup over interchange and assessments is the only area where you have the ability to negotiate credit card processing costs.

Keep in mind that many factors contribute to the markup, so not everything will be negotiable, or it will only be negotiable to a point.

Furthermore, the markup isn’t all profit. it’s split among all of the organizations that facilitate the processing of your business’s transactions such as the acquiring bank, processor, ISO(s), gateway or software provider and others. The markup must cover cost as well as profit for all of these entities.

Markups differ significantly from one processor to the next both by amount, pricing model and the types of fees charged. These inconsistencies are why it’s difficult to accurately compare credit card processing on the open market. Here at CardFellow we dictate the pricing model that processors must use to ensure fair, competitive pricing that can be accurately compared.

Pricing Model

Interchange and assessments are the same for all processors. The method the processor uses to pass these costs to you is what is important. The two most basic types of pricing are interchange plus and bundled. They’re also referred to as pass through and tiered, respectively. Each pricing model is outlined below, and there’s also a detailed post comparing interchange plus vs. tiered pricing here.

Interchange Plus or Pass Through

With interchange plus pricing the processor’s markup isn’t dependent on interchange qualification. This separation of costs keeps the processor’s markup the same regardless of the type of card you accept, or how your process it. There are no qualified, mid-qualified or non-qualified rates with interchange plus.

The processor earns a fixed percentage regardless of the underlying interchange. For example, 0.25% is an example of an interchange plus rate quote. No fancy tiers, not qualification at the processor level — just one simple rate that gets added to actual cost (interchange).

Interchange plus allows for interchange credits on refunded transactions. For example, when you issue a customer a refund, you are supposed to receive a partial credit of the interchange fee paid on the original transaction. This refund credit is not issued on bundled pricing models, but processors are capable of issuing interchange refunds on interchange plus pricing. However, just because a processor is capable of issuing interchange credits doesn’t mean it will.

IMPORTANT

Like with bundled pricing, processors are capable of manipulating costs under an interchange plus pricing model, too. For example, interchange plus pricing does not guarantee that a processor will pass assessments at true cost, issue interchange credits, or refrain from applying a discount to refund volume. This article goes into more detail about the dangers of becoming pricing model-complacent.

This is yet another reason why it’s important to have expert guidance, like that offered by CardFellow, to ensure you secure a truly competitive processing solution for your business.

Another benefit to interchange plus is that it allows for businesses to reap the benefits of decreases in interchange fees. For example, businesses with interchange plus pricing will benefit from lower debit card charges from the Durbin Amendment due October 1, 2011.

Interchange plus is the least expensive, most transparent form of credit card processing pricing. For these reasons, it’s the only form of pricing that processors are allowed to quote here at CardFellow.

Tiered or Bundled

Tiered pricing, also referred to as bundled or bucket pricing, is named for the way a processor categorizes interchange fees into three pricing tiers called qualified, mid-qualified and non-qualified. Although three tiers are most common, this pricing model can have separate sets of tiers for various types of cards. For example, six-tier pricing where credit and debit cards each have their own three tiers is gaining in popularity.

On a bundled pricing model the processor uses something called an interchange qualification matrix to route interchange fees to the qualified, mid-qualified, or non-qualified tiers.

A big problem with tiered pricing is that interchange fees are often not disclosed on your merchant processing statement (although they sometimes are), and the processor doesn’t tell you into which tier individual interchange fees are being routed. This leaves you with no way to calculate exactly how much you’re paying above the actual processing costs of interchange and assessments.

Tiered pricing has played a big role in building the processing industry’s shady reputation.

Inconsistent Buckets

Inconsistent buckets is the processing industry’s term for, “there’s no way to compare credit card processing quotes that are based on tiered pricing.”

Tiered pricing allows a processor to manipulate charges behind the scenes. Essentially, they can raise your cost without having to raise your rates. They do this by routing more interchange fees to the mid and non-qualified pricing tiers. Since there’s no consistency regarding interchange qualification, it’s impossible to compare tiered pricing among different processors.

Let’s look at an example to illustrate inconsistent buckets. Let’s pretend that we have the following quotes from two different processors:

Processor A

Qualified Rate:1.49%
Mid-Qualified Rate2.59%
Non-Qualified Rate2.99%

Processor B

Qualified Rate:1.69%
Mid-Qualified Rate2.25%
Non-Qualified Rate2.49%

Look only at the qualified rate, Processor A is offering a much better deal. What you don’t know is how many interchange categories are being routed to the qualified tier. Processor A may be routing the majority of transactions to the mid and non-qualified tiers making Processor B the better option. Of course, there’s no way to tell just by looking at the numbers.

Types of Fees

Credit card processing fees are either flat fees, transaction fees, or based on volume. Assessments are listed above, and interchange fees (or at least a portion of them) are published by Visa and MasterCard. The only inconsistent portion of cost is the processor’s markup. Unfortunately, the scope of different fees and pricing models utilized in the marketplace makes accurately comparing markups a daunting task.

This is the reason why we dictate the pricing model and fees that processors are allowed to quote here at CardFellow. All quotes are based on interchange plus pricing so that our software can present you with an accurate comparison of costs.

Trying to list the various fees that individual credit card processors charge is like herding cats. When comparing processing quotes, it’s easier (and more useful) to break fees down into three general categories and then compare each offer based on the estimated effective rate.

Volume

With interchange plus pricing (the best kind) the volume fee will be a single number such as 0.25%. With tiered pricing the volume fees will be in the form of a qualified, mid-qualified and non-qualified rate, and there may be more than one set of tiers.

Volume-based fees are levied against your business’s sales volume. The competitiveness, consistency and transparency of the volume-based markup are dependent on the pricing model that your merchant account utilizes.

Transaction

Credit card transaction fees often contribute more to total cost than volume fees. So, don’t ignore transaction fees to focus just on the volume markup (processor’s rate over interchange).

Transaction fees are charged each time your machine or gateway contacts the processor to get or give information, and they are a pre-determined fixed dollar amount regardless of the type or size of the transaction.

Flat

Flat fees are consistent regardless of sales or transaction volume. Monthly and annual charges are examples of flat fees.

Cost Distribution

With competitive pricing the majority of credit card processing costs are paid to your customers’ issuing banks through interchange. The remaining costs are split among a varying number of players such as the acquiring bank, processor, ISO(s), and equipment or software provider. Exactly how many players there are depends on the provider and your business’s processing needs.

Here’s an example that illustrates how credit card processing costs are distributed. Let’s pretend that you’re processing a $50 transaction by swiping a customer’s (consumer, non-reward) Visa credit card through your credit card machine. For this example we’ll assume that you used CardFellow to obtain a competitive interchange plus merchant account with rates of 20 basis points and $0.10 per transaction.

Interchange:
1.54% plus $0.10 = $0.87 goes to the issuing bank
Assessments:
0.11% plus $0.0195 to Visa when the transaction is authorized and another $0.003 when it’s settled = $0.07 goes to Visa
Card Markup:
.20% plus $0.10 to the processor = $0.20 goes to the processor
You are left with:
$50 – $0.87 – $0.07 – $0.20 = $48.86 (2.28% overall effective rate)

Getting the Lowest Rates

Now that you know where processing fees come from, you know that the best credit card processor is the one that offers you the lowest markup over interchange and assessments. As we outline in this article, you shouldn’t be shopping for the lowest rates. Instead, you should be shopping for the lowest overall markup over base cost. Furthermore, you want to look at the whole picture and consider the effective rate. Don’t just focus on the interchange markup or another single fee.

Separate Costs

Interchange and assessments account for the majority of processing expense, and they’re not negotiable. Separate costs into interchange, assessments and markups when shopping for a merchant account and focus solely on getting the lowest markup.

Of course, you can make your life easier by letting CardFellow do the shopping for you. Sign up for free here at CardFellow to get instant interchange plus quotes from multiple processors.

Simplicity is Expensive

Simplicity is expensive when it comes to credit card processing. Companies like Square and PayPal Here are making nice profits by offering flat rate pricing to businesses that don’t spend the time to learn how processing fees really work.

For most businesses, credit card processing fees are second only to rental and real estate expense. All business people and entrepreneurs are busy, but the time invested in learning about credit card processing fees will pay off in spades.

Simple and competitive are two very different things, and for most businesses, credit card processing fees are either one or the other.

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Ben Dwyer

BY Ben Dwyer

Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing.As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.

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50 COMMENTS

  1. from kodi, on September 16, 2018 19:10:54

    Any insights on the machines a business needs to accept the various credit and debit cards? Is it better to buy them somewhere or rent them?

    • from Ellen Cunningham, on September 17, 2018 10:21:02

      Hi Kodi,
      Buying a universal machine is usually your best bet. There are several popular brands that can be reprogrammed (if you switch processors in the future) such as Verifone and Ingenico. You can buy machines directly from a processor, or in some cases from an online store. However, if you purchase online, be sure it’s not contingent on signing up with a particular company.

      In general, you’ll want to find your credit card processor first, and then choose a compatible machine. You can sign up to get free quotes from multiple companies through CardFellow’s processor comparison marketplace. There’s no obligation, and you’ll be able to browse our equipment directory to research equipment as well. The signup form is here: https://www.cardfellow.com/sign-up

      I hope this helps!

  2. from James, on October 13, 2017 16:52:31

    What is the best course of action for a restaurant that has low check averages?

    My average sale will be roughly $15 and lower so would the best course of action is to go the traditional way with interchange plus assuming that the mark up is 0% + .10 cent (Comerica but chase will also match that) or flat fee of 2.75%?

    Any thoughts would be great. Thanks!

    • from paul, on December 26, 2017 15:08:53

      I’m looking for the best rate on a government card 90% of my business is done with the government so I need the best rate on that card. Any Help would be appreciated

      • from Ellen, on December 27, 2017 11:06:13

        Hi Paul,
        Getting the best pricing for government cards is a two-part process. You’ll need a gateway that can provide Level III data (to achieve the lowest “wholesale” costs) and a processor that charges a separate markup, to achieve the lowest fees over wholesale. I’d suggest reading our guide to level III data first, and then signing up to get free quotes from processors here at CardFellow. Those numbers won’t be exact since we’ll need to manually adjust for the government cards, so once you’ve filled out the form, give us a call or shoot me an email (ecunningham at cardfellow.com) and we can help you find the best pricing for your needs.

    • from Ellen, on October 16, 2017 10:52:14

      $15 is on the cusp of whether flat rate or interchange plus is better. However, interchange plus may not be the way to go if you’re not getting things like a lifetime rate lock, no padding on interchange, etc. which isn’t always the case in the open market.

      I’d strongly suggest getting quotes through CardFellow, where processors are required to commit to a lifetime rate lock, interchange passed with no padding, and more. You’ll be able to see the best pricing possible from several credit card processors, and there’s a Square widget that compares to 2.75% pricing as well, so you can easily see the total costs you could expect to pay on either model.

      It’s free and no obligation. Try it here: https://www.cardfellow.com/sign-up

  3. from Gloria Fortier, on July 14, 2017 16:09:39

    we have multiple merchants and they all charge the $500.00 annual mc fee.. is that right? If we are ecommerce and paid once should we be obliged to pay and pay again?

    • from Ellen, on July 17, 2017 14:13:15

      Hi Gloria,
      Merchants are businesses, so I’m not sure what you’re referring to. Do you mean you use multiple processing companies to accept credit cards and they all charge an annual fee?

  4. from Dee Kaylor, on January 25, 2017 13:19:56

    Been trying to do more research, as I get so many calls from credit card processing firms that insist my company is being overcharged to process credit cards. The newest calls from firms is stating that if I am not seeing “Rewards Credits” as adjustments on my monthly credit card statement, I am being ripped off. This credit card processing company is stating I am losing out on $3,000.00 to $10,000.00 in potential refunds. Every company has a different sales spin and want a copy of my last three credit cards statements to analyze and show my savings they can provide. I do not swipe any cards, they are all entered manually and once some processors hear that, they change their tune on fees. How do I find out if we are truly supposed to be receiving these refunds and how to approach my current merchant services firm about receiving them. According to my last phone contact, they said it is a law that processors are supposed to pass these credits on to the consumer instead of keeping them. HELP!

    • from Ellen, on January 25, 2017 16:03:37

      Hi Dee,
      You’ve come to the right place! We can certainly help you sort through everything. Since we’re not a processor ourselves, we can show you the full story free of sales jargon. There is no law that processors are supposed to pass on credits, so if you do a lot of refunds to customers, it is important to get your credits. However, I’d strongly suggest considering a new processor instead of trying to get your current processor to price fairly. If they’re already not returning your credits, it will be difficult to coax them to do so for any length of time, and you won’t necessarily know if they do.

      I’d suggest creating a profile here at CardFellow, where you’ll see pricing available from multiple processors, each one required by legal agreement to pass your credits to you. You can use our no-obligation quote tool for free here: https://www.cardfellow.com/sign-up

  5. from DOn, on September 8, 2016 13:20:21

    I was just looking over my most recent statement from processor and found a new fee called MC Location FEE for $3.00. Is this something new Mastercard is charging everyone with a terminal? The customer service rep couldn’t tell what it was for except that MC started charging everyone a few months ago. Thanks.

    • from Ellen, on September 8, 2016 15:31:09

      Hi Don,
      Funnily enough, we just posted an article about the MasterCard location fee. It’s not just for everyone with a terminal, it’s for everyone, period. The article we wrote is here: https://www.cardfellow.com/blog/mastercard-annual-merchant-location-fee/

      Some processors will be assessing a $3 fee, while others will be charging $15. Who’s your processor?

      • from DOn, on September 8, 2016 18:25:13

        Flagship Merchant Services. There fee is $3.00 per account. I have two accounts. One with a terminal and one through a website.

  6. from Matt, on May 2, 2016 13:11:17

    How do interchange plus prices compare to membership/subscription based models like Payment Depot that don’t charge any additional percentage-based markup above interchange in exchange for a somewhat higher monthly fee? Does Card Fellow include membership-based processors in your price comparison?

    • from Mik, on June 28, 2016 20:07:40

      This is a very informative article. As a budding cc analyst, this is simply tremendous. Thank you

    • from Ellen, on May 3, 2016 17:25:25

      Hi Matt,
      Great question. The answer on how it compares is: it depends. The 0% (or “subscription” style) pricing can be more competitive in some cases, but not in others. In general, it’s a transparent pricing model and could be low cost. You don’t need to run from it, but it’s also important not to fall for the hype and think it’s automatically cheaper. We have an article that goes through it in depth, available here: https://www.cardfellow.com/blog/flat-rate-subscription-merchant-account/

      We do include membership-based processors in our comparison options. Payment Depot is actually a member of CardFellow, and places quotes through our system, but you can request quotes from any processor that you’d like and our software will show you how the costs stack up. Using our quote comparison tools, it’s possible to compare as many companies as you want.
      I hope this helps!

  7. from Jack, on April 8, 2016 12:44:50

    Do Mastercard and Visa publish their rates that are on top of interchange?

    • from Ellen, on April 10, 2016 20:05:31

      Hi Jack,
      What do you mean by their rates on top of interchange? The assessments and dues? If you scroll to the dues/assessments part of this article, those are the charges that go to Visa and MasterCard.

      • from Mike, on January 4, 2017 17:42:51

        Pardon my ignorance, but I don’t see a dues/assessments section. There’s only a section about assessments with no mentions of “dues” whatsoever. Are they one in the same?

        • from Ellen, on January 5, 2017 14:29:44

          Sorry, you’re correct that it’s only called “Assessments” in this post. Yes, for all intents and purposes, dues/assessments refer to the same thing: the charges from the card brands.

  8. from Gerald Star, on December 19, 2015 01:16:18

    I had quotes from a “no contract” “no termination’ processor that had no annual fees and just a $5 monthly fee. Terminals were free and had equipment failure guarantee. Also the rates where highly competitive.. But then a higher priced processor was able to point out that there was indeed a 3 year contract and that liquidated damages for early termination could be in the thousands of dollars. It was hiding on page 42 of their merchant services guide. Then they also pointed out the 3-party processor probably lacked proper encryption software monitoring and improvements that could cost merchant significant undisclosed security fees every month. The company siting this is to provide proof of these security fees that range between $100 to $150ba month. Have you been hearing merchant complaints concerning both of these issues ?

    • from Ellen, on December 22, 2015 10:24:17

      Hi Gerald,
      This sounds like misleading information at best. Most processors are adequately equipped with security features like encryption technology. Liquidated damages clauses do happen and can be quite expensive, but they can be avoided. (At CardFellow, we prohibit cancellation fees in our marketplace.)

      The complaints that we tend to hear come from businesses that didn’t use CardFellow to find their processor, because the information is misleading or incorrect and ends up costing them money. Businesses that use CardFellow benefit from fully disclosed pricing, so there aren’t things like unexpected security fees popping up, and there are no cancellation fees at all.

  9. from Doug, on October 18, 2015 15:17:37

    Are these fees for all regions? If not, is there a resource for Canada, LATAM/LAC, and Europe?

    • from Ellen Cunningham, on October 19, 2015 13:37:44

      Hi Doug,
      The information in these articles applies to the United States unless otherwise specified. Unfortunately, I don’t know of a comprehensive resource for processing information in the regions you mention.

  10. from mary, on September 15, 2015 18:33:31

    I have been shaking my head over the high fees – cc and then bank fees – still confused but not so much…

  11. from Nicola Balmain, on July 16, 2015 19:45:10

    I am very appreciative of your detailed articles and advice, yet, I am still very confused as the best approach I should take for engaging the right (and best priced) merchant services provider.

    I am a new start-up business offering travel related products to international destinations. I anticipate my first year revenue to be approx $800K, however my first few months will be slow.

    How do I decide the BEST provider for my online transactions?

  12. from Richard Heuser, on July 12, 2015 13:34:52

    The processing fees a merchant is assessed for the convenience of utilizing credit card payments, can they be passed on to their customers? I thought this was prohibited, at least with MasterCard. Thank you.

    • from Ellen Cunningham, on July 14, 2015 09:01:17

      Hi Richard,
      The rules surrounding surcharges can be complicated (and vary by state) but there are ways that businesses can pass fees to customers. There is more information available in this post.

  13. from carol gallagher, on May 25, 2015 15:17:28

    Where can a send my merchant statements to be analyzed? I am with PNC and the fees are VERY high.
    Thanks
    Carol Gallagher

    • from Ellen Cunningham, on May 26, 2015 08:49:04

      Hi Carol,
      Currently we only offer statement analyses to clients who chose a processor through the CardFellow marketplace, but we plan to offer the service to anyone in the future. If you’re considering a new processor, I suggest signing up for a free account at CardFellow. In just a few minutes you’ll get fully disclosed quotes and we’ll be able to discuss your specific business needs to help make sure you’re getting the best possible pricing.

  14. from John Pettit, on May 20, 2015 10:47:54

    How does Bank of America rate?

    • from Ben, on May 20, 2015 10:55:10

      Hi John,
      Processors can set pricing and terms on a per-case basis, so “ratings” and “reviews” are generally unhelpful unless you know the exact pricing, terms and sales channel of the person(s) rating or reviewing a processor. Check out our article on credit card processor reviews for more information on this topic.

  15. from Andrew Holshouser, on May 15, 2015 21:00:29

    I will own a car wash by June1st. I will have lots of smaLl transactions. I need a card processor that specializes in high volume and low dollar and very low fres. Can you help me?

    • from Ellen Cunningham, on May 18, 2015 09:00:09

      Hi Andrew,
      We can certainly help you get competitive pricing. If you haven’t already done so, you can create a free business profile at CardFellow. Once you enter your information, you’ll receive quotes with fully disclosed pricing from several processors in just a few seconds. We don’t share your contact information with the processors, so you can review your quotes in private without pressure from sales calls. If you have any questions during the process, you can give us a call and we’ll be happy to help.

  16. from Amber, on April 24, 2015 11:44:41

    Hello I work at a car dealership, and our sales are between 80,000-150,000 a month. We are paying a very high rate in fees. We do some swiped transactions but we do a lot of manually entered transactions. Which company do you think would be the best?

    • from Ellen Cunningham, on April 27, 2015 09:39:51

      Hi Amber,
      The best thing to do would be to sign up at CardFellow.com so you can get several quotes directly in just minutes. We’ll also be able to walk you through the quotes at that point so that we can talk to you about real numbers and make sure you’re getting the most competitive rate. Signing up with CardFellow is completely free, and processors won’t see your contact information unless you decide to work with them. If you have any questions, please let me know!

  17. from Brendan, on March 19, 2015 18:32:39

    You had a few minor errors in relation to the new changes, according to other different sources:

    1. MasterCard’s January 2015 changes happened specifically on the 5th. Visa’s 2015 changes were on the 1st.

    2. The non-US Cross-Border fee update is on the wrong fee. The Acquirer Program Support Fee actually isn’t changing.

    3. The April MasterCard Cross Border Assessment Fee changes are actually on the 17th, not 18th. Visa’s int’l fee changes are still on the 18th.

    Keep up the good work. It’s a great resource! I see this page quoted quite often in interchange fee articles from other sites.

  18. from Brian Hecklemeyer, on March 11, 2015 20:18:23

    Great article. Keep posting, Ben.

  19. from Bryan, on January 21, 2015 14:08:48

    I would like to say this is the best article I have read on this subject. As the first Pizza Shop in my city to take credit cards and the first in my chain, I have learned the hard way a bunch of this.

    I was only doing some more research to verify what the merchant processor scammers were telling me.

    I have actually had two companies recently tell me they can get me better than interchange rates because they are wholesalers. I have yet to be able to verify if this is even possible.

    • from Ben, on January 29, 2015 16:30:03

      Hi Bryan,
      I’m glad you found this article helpful. Processors or sales agents will sometimes claim to be “wholesale” providers, but there actually is no such thing. Interchange rates are set by the Card Associations and are the same for all processors.

  20. from Gerald, on December 10, 2012 23:46:06

    Very Informative. I am just beginning to scratch the service on just how involved the pricing and fees are when it comes to credit card processing. You have broken it down to a science. Thank you

  21. from Doug, on November 12, 2012 11:29:55

    Is MasterCard’s “Assessment” and “Acquirer Brand Volume Fee” based on authorizations or settlements?

    • from Ben, on November 26, 2012 10:48:47

      Hi Doug,

      MasterCard’s assessment of 0.11% (0.13% for transaction greater than $1,000) and Acquirer Brand Volume Fee are based on gross sales volume. They are not based on authorization or settlement transactions. MasterCard’s Network Access and Brand Usage (NABU) fee is charged for each U.S.-based authorization transaction regardless of whether the transaction is settled.

  22. from John Che, on October 18, 2012 14:57:48

    I would like to know what processing company you would use if you were me. I do some M/C Visa and AMEX, although we do not do a lot of transactions per day (like a restaurant). Our charges are in the 10s of thousands of dollars and we do 4-10 a month.
    Thx
    John

    • from Ben, on October 18, 2012 15:53:46

      Hi John,

      That’s an easy question. I would sign up for free here at CardFellow to receive multiple instant quotes, and then I would choose the lowest offer.

      – Ben

  23. from Michelle, on September 12, 2012 21:00:52

    This information was very helpful in assisting with my decision… thank you very much.

  24. from Angelo, on July 2, 2012 14:15:34

    Great Info again Ben. Thank You.
    I understand the only item negotiable in a pass through contract is a processors mark-up fee. I wonder whether processors receive incentives from either the debit networks or mc/v associations in the form of rebates. In other words, if processors achieve certain targets are they able to either negotiate better debit/credit rates or receive cash incentives?
    If a merchant processes 2m debit transactions per year is that enough leverage to have the various debit networks compete for the business?
    Have you ever heard of processors receiving rebates/incentives from either any of the debit networks, associations or issuing banks?

    • from Wesley, on January 21, 2014 02:51:12

      Angelo, the only thing that might change once the processor’s volume grows is the floor cost, which the bottom cost of processing a transaction on top of interchange. The interchange will never change.