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How Much Does Accepting Credit Cards Cost?

Cara O'BlenessCara O'Bleness administrator Posts: 68 Site Admin
Hi, all:

Understanding the fees associated with accepting credit cards can be overwhelming. It's important to understand what each fee is and how they work.

International Bancard is a nationally recognized industry leader in credit card processing, as well as a frequent StartupNation contributor.

Read the article below by International Bancard to learn about credit card fees and how they work:


If you have any questions about the cost and fees associated with accepting credit cards, visit https://startupnation.com/InternationalBancard/?utm_source=community&utm_campaign=newtopic&utm_medium=57186, and a Certified Payments Professional from International Bancard will be happy to help you.
Cara O'Bleness
Content Director


  • Maurice GMaurice G subscriber Posts: 2 Member
    This is a great article that covers the basics of card acceptance costs. It's worth reiterating that Interchange and Assessment fee's, commonly referred to as "pass-through fees", are preset by the card brands/issuers and are unnegotiable. Processors who charge a flat-rate such as Square or Stripe are accounting for these fees too as they are bundled into their rates already to simplify what is usually complex pricing, but flat-rate pricing is not always the most cost-effective. The card brands release updates every April and October so these pass-through fees can change (many usually increase over time). There are hundreds of different Interchange rates and categories so don't bother trying to learn all of them either. 

    The Processing fees such as your pricing model, discount rate, transaction fee, per chargeback fee and monthly fee are all negotiable but they will still make up a minimal amount of your total fees (usually 25% or less). 

    When looking at costs, you need to consider the card type (debit vs credit vs commercial) as well as the card brand (Visa vs MasterCard vs Discover vs Amex). In most cases, debit cards have the lowest interchange rates/fees but there are some cases on smaller ticket items such as coffee where debit cards can be more expensive than credit or even commercial cards (i.e. regulated debit). The more "perks" a card has (cash back, miles, points, etc.), the higher the interchange rate/fee. 

    When it comes to card brands, Amex is notoriously the most expensive to accept but their interchange is very simple actually. There are 3 tiers based on the dollar amount of the transaction so lower ticket merchants will end up paying less. These tiers are based on the business type, or Merchant Category Code (MCC). 
  • emmamegan0190emmamegan0190 subscriber Posts: 6 Member
    Complex, daunting and overwhelming are the words to describe credit card processing fees in the best way. Sadly, to process credit cards effortlessly, paying the fees is important. However, instead of paying the charges without thinking, it is required to understand them. This is because it helps to dispute any amount that seems unfair or isn’t clear the right way.

    Credit Card Processing Rates

    Generally, most of the merchants know the processing rate(s) they were charged with during sign up for the account or are aware about the rates that are advertised by the processors. Why there’s so much difference in the processing rate then? Because some of the quoted prices are only a processor’s markup on the wholesale price of transaction. However, others are a combination of wholesale cost and processor’s rate markup.

    Various Type Of Merchant Account Fees

    • Transactional Fees
    • These are charged when a transaction is run and represent the largest cost to run a merchant account. They come in two forms:1.Percentages2.Per-item dollar amountsBoth are charged on a transaction quite often
    • Scheduled Fees
    • Apart from the transactional fees, there’s an expected flat fees too. They differ in terms of name, applicability and value. Few among these are shown on the monthly statements.
    • Incidental Fees
    • Though scheduled fees are charged always, incidental fees appear at each occurrence. Chargeback fee is charged when a chargeback takes place. However, the fee is not charged if there are no chargebacks.

    For more info visit Paycron website blog

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