Credit Card Processing Fees Explained

What are credit card processing fees?

Credit card processing fees are the costs a business pays when a customer uses a credit card. The merchant generally pays these costs, and the processor deducts them either transaction-by-transaction or through monthly billing and settlement.

A typical processing bill may include a percentage of the sale, a fixed fee per transaction, card-network costs, processor markup and, depending on the provider, account or service charges. Because the total is split into many small pieces, comparing only one advertised percentage can give a misleading picture.

The three main components of processing fees

1. Interchange: the issuing bank's share

Interchange is normally the largest component of the underlying card cost and is paid to the financial institution that issued the customer's credit card. The reference fee guide describes typical interchange as ranging from approximately 1% to 3% of the transaction amount, although the exact amount can be lower or higher depending on the card program and transaction circumstances.

Interchange is not one universal rate. A basic consumer card used through a secure chip or contactless transaction may have a different interchange cost from a premium rewards card, commercial card, manually keyed transaction, ecommerce transaction, recurring payment, or international card.

Security and transaction risk can also influence which interchange category applies. Card-present EMV chip and contactless transactions generally provide stronger authentication and lower fraud exposure than older magnetic-stripe-only or manually entered transactions, which can affect the applicable fee category.

Visa interchange fees

Visa does not have one single interchange rate. The reference guide lists a 2026 processing-fee range of approximately 1.15% to 2.40% per transaction. The applicable rate varies according to the specific Visa card, merchant category, transaction method, and qualification criteria.

Mastercard interchange fees

Mastercard likewise uses many interchange categories. The reference guide lists a range of approximately 1.15% to 2.50% per transaction. Premium, commercial, card-not-present, and other transaction types can fall into different categories.

Discover interchange fees

Discover operates its own payment network and issuing relationships. The reference guide lists Discover processing fees of approximately 1.40% to 2.40% per transaction.

American Express interchange / network fees

American Express also operates its own network and historically has often carried higher merchant costs for some card products. The reference guide lists a range of approximately 1.43% to 3.30% per transaction.

Because Discover and American Express operate their own networks, their economics differ from the traditional Visa/Mastercard model. In all cases, merchants should rely on actual network schedules and their processor statement rather than assuming every card from the same brand has the same cost.

This is one reason a true interchange-plus statement can show many different underlying rates: the processor is passing through the actual cost associated with the card and transaction type instead of forcing everything into one blended percentage.

2. Assessment and card-network fees

Assessment fees—also called network fees—are paid to the card network for routing transactions and operating the payment system. They are generally much smaller than interchange. The reference guide describes these fees as roughly 0.15% to 0.25% of transaction value, although individual network schedules can also include small fixed per-transaction amounts and other card-brand fees.

These network charges are separate from the processor's markup. Under a transparent interchange-plus model, a merchant can more clearly distinguish interchange and card-brand costs from what the processor itself earns.

3. Processor markup

The processor's markup is the part that can vary significantly from provider to provider and is often the most negotiable component. It may be expressed as a percentage, a fixed amount per transaction, a monthly platform fee, or a combination.

Example: what happens to a $100 card transaction?

The following is an illustrative example showing how a $100 transaction could be split. It is not a universal rate quote; real card costs vary.

In this example, the all-in transaction cost is 2.24%. The important point is not that every $100 transaction costs $2.24—it does not—but that the headline processor markup is only one part of the final amount.

Why fixed transaction fees matter more on small tickets

A fixed 10¢ or 30¢ fee barely changes a large sale, but it can materially increase the effective rate on a small coffee, snack or convenience-store transaction. For example, a 30¢ fixed fee equals 3% of a $10 transaction before any percentage-based charge is added.

Interchange and assessment fees by card network

Because customers use different card brands and card products, merchants can encounter different underlying costs from one transaction to another. The reference fee guide provides the following 2026 ranges for the four major card networks.

Why Visa and Mastercard costs vary

Visa and Mastercard publish many interchange categories rather than one merchant rate. A card can be a basic consumer card, premium rewards card, business or commercial card, domestic card, or international card. Transactions can also be card-present, contactless, ecommerce, recurring, or keyed, with different categories applying to different combinations.

Why American Express and Discover are different

Visa and Mastercard primarily operate networks connecting issuing banks and acquiring institutions, while American Express and Discover have historically operated more integrated network and issuing models. Because their network structures, card products, rewards programs, and risk economics differ, their merchant costs do not necessarily match Visa or Mastercard.

Interchange vs. assessment vs. processor markup

Interchange is principally the issuing-bank component. Assessment/network fees belong to the card network. Processor markup is a third layer added by the payment provider. Keeping these components separate is especially important when evaluating interchange-plus pricing.

Examples of credit card processing prices in Canada

The table below shows selected publicly posted Canadian pricing examples available as of August 29, 2026. It is meant to illustrate how differently providers package their fees. It is not a complete comparison, and rates can change.

Pricing above is summarized from the providers' public pages and may not include every product, plan, special rate, hardware cost, software subscription, tax, foreign-card charge, refund policy or contractual term. Always verify the current provider quote before making a decision.

Illustrative Goopter cost-plus example on a $100 sale

To show how cost-plus math works, assume the underlying interchange + network cost for a particular $100 transaction is $1.74. If the merchant qualified for the published Goopter professional-services example of Cost + 0.20% + 10¢, the markup on that $100 transaction would be $0.30:

If the underlying card cost were lower, the merchant would retain that benefit under a true cost-plus model. If the underlying card cost were higher, the transaction's total rate would also rise. This is why interchange-plus rates naturally vary from transaction to transaction.

Understanding the three common pricing models

1. Flat-rate pricing

Flat-rate pricing combines interchange, network fees and processor margin into one blended rate such as “2.5%” or “2.9% + 30¢.” Its biggest advantage is simplicity: merchants can estimate processing cost without decoding interchange categories.

The trade-off is that the merchant normally pays the same blended rate even when a transaction's underlying cost is relatively low. The provider absorbs variability and prices the blended rate to cover the overall mix.

2. Interchange-plus / cost-plus pricing

Interchange-plus pricing separates the underlying transaction cost from the processor's markup. A quote might look like “interchange and card-network cost + 0.20% + 10¢”. This makes it easier to see which part is the wholesale card cost and which part is the provider's margin.

For merchants with meaningful card volume, this model can be attractive because lower-cost card transactions are passed through at their lower actual cost rather than being charged a higher blended rate.

3. Tiered / qualified-rate pricing

Tiered pricing groups transactions into categories such as qualified, mid-qualified and non-qualified. A processor may advertise a very low “qualified” rate, but only certain transactions meet that category. Others can be downgraded and charged more.

The challenge is transparency. A merchant can see an attractive rate on the sales agreement while the actual statement contains differential fees, non-qualified charges, network costs and account fees that push the effective rate much higher.

Additional processing fees that can increase your real cost

The advertised transaction rate may not be the end of the story. Depending on the provider and contract, merchants may encounter additional charges such as:

• Setup or application fees for opening or configuring the account.
• Monthly administration fees unrelated to transaction volume.
• Monthly minimum fees if processing fees do not reach a required threshold.
• Statement fees for paper or electronic statements.
• Batch fees each time a terminal closes or submits a group of transactions.
• Deposit fees associated with settlement to your bank account.
• PCI compliance or non-compliance fees.
• Gateway or virtual-terminal fees for online or manually entered payments.
• Chargeback/dispute fees when a cardholder contests a transaction.
• Refund fees or non-refundable original processing charges.
• Cross-border and foreign-card fees.
• Currency-conversion fees when currencies differ.
• Terminal rental or lease charges.
• Early termination fees for cancelling a contract before the term expires.

What is a monthly minimum fee?

A monthly minimum does not necessarily mean you must process a minimum amount of sales. It can mean you must generate a minimum amount of processing fees. For example, if a contract requires at least $25 in monthly processing fees but your actual fees are only $15, the processor could charge the $10 difference.

Why “no hidden fees” needs to be verified

Almost every provider prefers to describe its pricing as transparent. The best way to verify that claim is to inspect the merchant agreement and a real statement. Look for every recurring fee, transaction-level fee, qualification adjustment and network charge—not just the rate emphasized by the salesperson.

How to read your processing statement

Merchant statements vary, but a useful review starts with four numbers:

1. Total card sales for the statement period.
2. Total number of transactions.
3. Total processing-related fees deducted or billed.
4. Net deposit / settlement amount after processing charges and adjustments.

Then look for separate line items such as interchange, assessments, processor markup, authorization fees, batch fees, account fees, PCI fees, chargebacks, equipment charges and taxes. If you cannot determine what a fee is for, ask the provider to explain it in writing.

Calculate your effective processing rate

Your effective rate converts all processing-related charges into one percentage of card sales. It is one of the easiest ways to compare your actual cost across providers or across different months.

Sample effective-rate calculation

Suppose your business processed $50,000 in card sales and paid $1,240 in total processing-related fees:

Transaction cost calculator

Use this calculator to see how percentage and fixed transaction charges behave at different ticket sizes. It is especially useful for restaurants and retailers with many small purchases.

What does a merchant-service provider do?

A merchant-service provider helps a business accept electronic payments and acts as part of the connection between the merchant, cardholder, issuing bank, card network and acquiring bank. Services may include merchant-account setup, payment authorization, settlement, terminal hardware, virtual terminals, online gateways, reporting, fraud tools, chargeback support and customer service.

Depending on the provider, some of these services are included in transaction pricing and others are billed separately. That is why a processor with a slightly lower transaction percentage can still be more expensive after monthly, gateway, PCI, batch or equipment charges are added.

Strategies to reduce credit card processing fees

1. Choose the pricing model that fits your volume and ticket size

Flat-rate pricing can be convenient for a small business that wants simplicity and processes limited volume. As volume grows, interchange-plus can become more attractive because the processor markup is separated from the card's underlying cost.

The fixed fee matters too. A merchant with thousands of $8–$15 transactions should evaluate per-transaction charges more carefully than a professional-services firm with a small number of $1,000 invoices.

2. Minimize avoidable chargebacks

A chargeback can cost more than the original processing fee because the merchant may lose the sale, the product or service, and a dispute fee. Practical steps include:

• Use clear billing descriptors so customers recognize the charge.
• Use AVS, CVV and other fraud controls for card-not-present transactions where appropriate.
• Keep signed receipts, delivery confirmation, order records and customer communications.
• Publish clear refund and cancellation policies.
• Respond to disputes quickly and provide complete evidence before the deadline.

3. Negotiate the processor markup

Interchange and network charges are generally not the part your salesperson can simply remove. The processor's markup and some account-level fees are where negotiation is more likely. Larger, stable processing volume can improve your bargaining position.

4. Encourage lower-cost payment methods where appropriate

In Canada, Interac debit can cost materially less than a credit-card transaction depending on the provider. For example, Square Canada's standard in-person debit rate is 0.75% + 7¢, while its standard in-person credit rate is 2.5%. Different processors structure debit pricing differently, so use your own quote for comparison.

5. Reduce keyed transactions when card-present payment is possible

Keyed or card-on-file transactions can carry higher costs because they generally have higher fraud risk. For example, Square Canada publicly lists 3.3% + 15¢ for manually entered/card-on-file transactions versus 2.5% for standard in-person credit-card transactions.

6. Audit your statement every month

Track your effective rate over time. If the rate rises, determine whether the cause is a different card mix, more online/keyed transactions, international cards, new fees or a processor pricing change.

How Goopter's merchant-service pricing works

Goopter publishes interchange-plus (cost-plus) pricing. Under this structure, the underlying transaction cost—interchange plus card-brand/network fees—is separated from Goopter's markup. This makes the processor margin easier to identify and allows lower underlying card costs to flow through to the merchant.

Personalized pricing by business and volume

Goopter's service-rate page organizes quotes by monthly processing volume, including $0–$10,000, $10,000–$50,000, $50,000–$100,000, $100,000–$250,000, $250,000–$500,000 and $500,000+. The exact markup can also depend on the business type and acceptance method.

Published zero-fee items

Goopter's current service-rate page lists the following processing/account items at $0:

Chargebacks

Goopter's published service-rate FAQ states that a chargeback has a $25 per-occurrence fee and that the fee is refunded when the merchant successfully reverses the chargeback.

Interac tap

Goopter's published FAQ explains that Interac tap/Flash can include an additional fee based on industry. It currently lists an additional $0.02 for certain categories such as quick-service restaurants, convenience/variety stores and bakeries, and $0.035 for other businesses, on top of the applicable Interac rate. It also identifies a $0.0085 Interac switch fee per transaction. Verify the current quote for your specific business before relying on these figures.

Why effective rate still varies under cost-plus

Even with a fixed Goopter markup, the all-in effective rate can change because the underlying interchange cost changes with your card mix and transaction method. A month with more premium, commercial, international or card-not-present transactions can produce a different effective rate from a month with mostly lower-cost domestic card-present transactions.

Credit card processing fee FAQ