Credit Card Processing Fees: What You Need to Know

Hello Friends,
Are you a business owner who accepts credit card payments? If so, it is important to understand credit card processing fees. These fees can add up quickly and impact your bottom line. In this article, we will explore the different types of credit card processing fees and how they work, the lowdown on every provider, tips to avoid paying unnecessary fees, and more.

Understanding Credit Card Processing Fees

To start, it’s important to understand how credit card processing fees actually work. When a customer pays with a credit card, the payment must go through a payment gateway and processing network. This is where these fees come into play. The fees vary depending on a few factors like the types of cards being accepted, the type of business processing the cards, and the card issuer.

There are four main types of credit card processing fees:

1. Interchange Fees

Interchange fees are fees charged by the credit card networks, like Visa or Mastercard, to process the transaction. These fees are usually a percentage of the sale and vary depending on the type of card being used. For example, a business may pay a higher interchange fee for a rewards card than for a standard debit card.

2. Assessment Fees

Assessment fees are also charged by the credit card networks and are usually a fixed percentage of the sale. These fees are charged in addition to the interchange fees.

3. Processing Fees

Processing fees are charged by the payment processor, like Stripe or PayPal, for handling the transaction. These fees are usually a flat percentage of the total sale.

4. Monthly Fees

Some payment processors may also charge a monthly fee for their services. This fee is usually a set amount and may include additional features like fraud detection or chargeback protection.

The Lowdown on Every Provider

Now that you understand the different types of credit card processing fees, let’s take a look at some of the top payment processors and their fees.


Stripe charges a processing fee of 2.9% + 30 cents per transaction. There are no monthly fees or setup fees with Stripe.


PayPal charges a processing fee of 2.9% + 30 cents per transaction. They do not charge a monthly fee but may charge additional fees for features like chargeback protection.


Square charges a processing fee of 2.6% + 10 cents per transaction for in-person transactions and 2.9% + 30 cents for online transactions. There are no monthly fees with Square.


Authorize.net charges a monthly fee of $25 per month and 10 cents per transaction. They also charge a $49 setup fee.

How to Avoid Paying Unnecessary Fees

Now that you know more about credit card processing fees and the different providers out there, let’s take a look at some tips to help you avoid paying unnecessary fees.

1. Negotiate with your Processor

Don’t be afraid to negotiate with your payment processor. Some may be willing to lower their fees to keep your business.

2. Know your Cards

Understanding the different types of cards that your customers use can help you make informed decisions about what types of cards to accept and which ones to avoid.

3. Monitor your Fees

Keep an eye on your monthly statements and make sure you are not being overcharged or charged for services you don’t need.

4. Choose the Right Processor

Research different payment processors and choose one that best fits your business needs. Don’t just go with the cheapest option, make sure they offer the features and support you need.


Credit card processing fees are a necessary evil for businesses that accept credit card payments. However, understanding how these fees work, knowing your options, and choosing the right payment processor can make a big difference in how much you pay. Be sure to keep these tips in mind as you navigate the world of credit card processing fees.

Until next time, happy processing!

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