Credit card processing fees, explained

The three parts of every card fee

When a customer pays you by card, the fee you pay is split between three parties.

Interchange goes to the bank that issued the customer's card. Visa and Mastercard set and publish the rates, and they're the same whichever processor you use. The rate depends on the kind of card (debit, credit, rewards, premium or business), how it's used (in person, online or recurring) and the kind of business.

Network fees go to Visa or Mastercard for running the network. They're much smaller than interchange.

Markup goes to your processor or payment provider. It pays for the service and is where providers compete.

What a $100 online sale costs

Here is one sale, itemized. Change the plan or the card to see how the split moves.

Visa interchange rates in 2026

These are Visa's published US rates for consumer credit cards used online, from its interchange table effective April 18, 2026. Mastercard publishes its own table with similar categories.

"Online payment" is the row Visa labels Product 1 under Card Not Present; recurring payments have their own row, and Visa's qualification guide sets the conditions for each. Payments that miss the data requirements fall to the non-qualified rate.

Large-bank debit cards usually cost much less

Under the Federal Reserve's Regulation II, debit cards issued by banks with $10 billion or more in assets carry interchange of at most 21¢ + 0.05% of the sale, plus a 1¢ fraud-prevention adjustment. On a $100 sale that's 27¢. Debit cards from issuers with under $10 billion in assets, which includes most community banks and credit unions, are exempt from the cap; Visa's rate for an exempt debit card used online is 1.65% + 15¢.

The cap itself is in court. In August 2025 a federal judge in North Dakota ruled the rule unlawful, but that decision is on hold while the Fed appeals, and the cap still applies.

Network fees

On a US card-not-present payment, a large US acquirer's published pass-through schedule lists these network fees:

From Wells Fargo Merchant Services' pass-through fee schedule, effective April 2025. The networks can change their fees at any time, and you pay the fee in force on the day of the payment.

How processors price their markup

• Flat rate. One price for every card, such as 2.9% + 30¢. Simple to understand. The provider keeps more on cheap cards like debit and less on premium cards.
• Interchange-plus. You pay each card's real interchange and network fees, plus a fixed markup such as 0.45% + 20¢. It shows what each card really costs, and it often costs less once you have steady volume or many debit customers.
• Tiered. Payments are sorted into "qualified", "mid-qualified" and "non-qualified" buckets with different rates. The provider decides which bucket a payment lands in, which makes the real cost hard to check.
• Subscription. A monthly fee plus interchange at cost and a small per-payment fee. Pays off at higher volume.

Other fees to look for

The rate is only part of the bill. Before you sign, ask whether any of these apply: monthly or statement fees, PCI compliance or non-compliance fees, gateway fees, batch fees, chargeback and dispute fees, fees for disputes you win, instant payout fees, international and currency conversion fees, fees for manually entered cards, minimum monthly charges, annual fees, and early-termination fees.

In 2022, payment processor First American Payment Systems agreed to pay $4.9 million to settle Federal Trade Commission charges that included hiding a three-year contract term and a $495 cancellation fee from merchants. Ask for every fee in writing.

How to work out your effective rate

Divide a month's total processing fees by that month's total card sales. If you paid $1,180 in fees on $40,000 of sales, your effective rate is 2.95%. It's a fair single number for comparing providers, because it counts the percentage, the fixed fees and every extra. The fee calculator works it out for a single sale or a month.

How to pay less

1. Negotiate the markup, not interchange. Interchange is fixed by the networks. The markup and the extras are what providers compete on.
2. Send complete payment data. Use address and security-code checks so payments qualify for standard rates instead of the 3.15% non-qualified rate.
3. Look at interchange-plus if many of your customers pay by debit card, where flat-rate pricing costs you the most.
4. Watch small sales. A 30¢ fixed fee is 3% of a $10 sale. A minimum order or bundles can help.
5. Use bank payments for large invoices. ACH is often capped at a few dollars per payment.
6. Cut disputes. Each one costs fees and counts toward the networks' monitoring programs. A recognizable billing name, delivery tracking and fast refunds all help.
7. Read every statement. New fees can appear without much notice.

Can you pass the fee to customers?

Sometimes. Card network rules allow surcharges on credit cards with conditions, debit cards can't be surcharged, and some states restrict surcharging. Check the current network rules and your state's law before you add one, and say so clearly at checkout.

Where card fees are heading

US merchants paid a record $198.25 billion in card processing fees in 2025, according to the Nilson Report. Three changes could move that number:

• The Visa and Mastercard settlement. Signed in November 2025 and given preliminary approval in June 2026, it would cut average credit interchange by 10 basis points for five years, cap standard consumer credit cards at 1.25%, and let merchants decline premium or commercial cards and surcharge more. It still needs final court approval.
• Regulation II. The Fed proposed a lower debit cap in 2023 that hasn't been finalized, and the current cap is being challenged in court.
• The Credit Card Competition Act. Reintroduced in January 2026, it would require large banks to enable a second network on credit cards. It hasn't had a committee vote.

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