With flat rate pricing, credit card processors charge businesses a certain percentage of the transaction plus a small per-transaction fee-typically $0.20 to $0.30. Certain qualified transactions can receive lower rates, while other transactions might receive higher rates. Under this pricing model, credit card processing companies categorize their fees by different transaction types. Three main types of pricing models are commonly used to determine credit card processing fees: tiered pricing, flat rate pricing and Interchange Plus pricing. However, these rates can vary depending on the credit card network a business operates through and the type of pricing model offered to the business. Average Credit Card Processing FeesĪccording to analysts, the average cost of credit card processing fees for vendors ranges between 1.5% and 3.5%. These fees can be charged monthly, annually or upfront when the transaction goes through. The payment processing company the vendor works with-usually separate from a consumer’s credit card issuer or a vendor’s credit card network-might charge an additional fee for managing transactions. To get a Mastercard or Visa, consumers must apply through separate issuing banks or financial institutions. The former two companies can issue their own credit cards. Most businesses work with four main credit card networks in the United States: American Express®, Discover®, Mastercard® and Visa®. These networks can sometimes differ from the buyer’s credit card issuer. Assessment FeesĪn assessment fee is charged by the vendor’s credit card network based on the vendor’s total monthly sales. Offline credit card processing, where the payment is made in person, can be pricier than online processing. It’s charged by the business’s credit card network to help cover the costs of processing the transaction. Interchange FeesĪn interchange fee is often the largest one vendors will pay. It might help to understand these fees prior to opening a credit card. There are three main types of processing fees vendors are likely to encounter as part of their credit card transactions: interchange fees, assessment fees and payment processor fees.
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