Guide
Payment processing fees explained
Updated 9 September 2026 · 8 min read
A card payment fee is built from three layers: interchange paid to the customer's bank, scheme fees paid to Visa or Mastercard, and the processor's markup. Flat-rate processors bundle all three into one number, commonly around 2.9% plus 30 cents for US online card payments. Any payment software you use charges its own fee on top of that.
The three layers of every card fee
Interchange is paid to the bank that issued the customer's card. It is set by the card networks and is the largest component. It varies enormously: a domestic debit card is cheap, a premium rewards credit card is expensive, and a commercial card from another country is more expensive still.
Scheme fees are what Visa, Mastercard and others charge for running the network. They are small but numerous.
The processor markup is what your provider keeps. This is the only part that is genuinely negotiable at scale.
Flat rate versus interchange-plus
Flat rate quotes one blended number for every card. It is predictable and simple, and it is what most small businesses should use. You slightly overpay on cheap debit cards and slightly underpay on expensive premium cards.
Interchange-plus passes through the real interchange and scheme costs and adds a stated markup. It is almost always cheaper above roughly $80,000–$100,000 a month, but the statements are harder to read and the savings depend heavily on your card mix.
The extras that do not appear in the headline rate
Currency conversion, typically an extra 1%–2% when you accept a card in a currency other than your settlement currency.
International card surcharges, commonly around 1.5% extra.
Dispute fees, usually a fixed amount per chargeback that you pay whether or not you win.
Payout fees for instant transfers, and monthly fees for certain reporting or fraud tools.
Software fees on top of processing
Payment software — invoicing tools, storefronts, booking systems, vertical SaaS — charges either a subscription, a percentage of volume, or both. A 0.5% software fee on $100,000 a month is $500, which is a real line item and deserves the same scrutiny as processing.
The correct comparison is total cost of the stack against what the software actually removes from your workload. A 0.6% fee that eliminates ten hours of admin a month is cheap; the same fee for a checkout button is not.
Where the savings actually are
Reducing failed payments and involuntary churn on subscriptions usually recovers more money than renegotiating a rate.
Sending complete data with each payment (address, email, description) can qualify some commercial-card transactions for lower interchange.
Cutting disputes has a double effect: you keep the revenue and avoid the fee.
Frequently asked
- What is a typical online card processing rate?
- Flat-rate processors commonly charge around 2.9% plus 30 cents for standard domestic online card payments in the US, with surcharges for international cards and currency conversion. Check your provider's live pricing page for the current figure.
- At what volume should I switch to interchange-plus?
- As a rule of thumb, it becomes worth modelling above roughly $80,000–$100,000 per month, but the answer depends on your card mix.
- Can I pass card fees on to customers?
- Surcharging is permitted in some countries and states and prohibited or capped in others, and network rules add further conditions. Check the rules for your jurisdiction before enabling it.