Understanding Credit Card Processing Fees: What Every Business Owner Should Know
When it comes to accepting credit card payments, business owners often overlook the true cost of processing. Credit card fees are not just minor expenses—they can eat into your bottom line fast if you’re not paying attention.
So who pays these fees? Not your customer—you do. And they’re not all created equal.
Processing fees generally fall between 1.5% and 3.99% per transaction, and are made up of a few core components:
- Interchange Fees – These are set in stone by the card brands (Visa, Mastercard, etc.) and make up the bulk of your costs. They’re non-negotiable.
- Assessment Fees – Also non-negotiable, these are smaller fees charged by the card networks based on your monthly volume.
- Processor Fees – This is where you have flexibility. These fees go to the payment processing company managing your transactions—and yes, this part is negotiable.
There are also software or terminal fees, depending on your point-of-sale setup. Some providers bundle these in; others don’t.
Pricing Models Matter:
From tiered pricing to flat-rate to interchange-plus, the model you choose can have a big impact on your total costs. For most businesses, interchange-plus is the most transparent and scalable option. Flat-rate can work well for low-volume startups. And tiered pricing? Proceed with caution—it often hides higher rates behind unclear categories.
At Good Products Business Solutions, we always advise against chasing the cheapest offer. Those “too good to be true” deals often come with free equipment but quickly turn into leases, hidden rate hikes, or minimum fees that kick in when your volume dips.
Bottom line: Processing fees are part of doing business—but they don’t have to be confusing or excessive. With the right partner (hi, that’s us), you’ll not only understand your costs, you’ll control them.payment processing. By understanding the nuances of merchant underwriting and collaborating with the appropriate partners, businesses can ensure seamless transactions and foster trust with their customers.
