This is such a general question that it requires multiple steps to answer. Do you process card-present or card-not-present transactions? What’s your average ticket size? Do your customers typically use debit or credit cards? With these answers, we can evaluate your effective rate, which is your most accurate estimate to determine how much does credit card processing costs.
How Much Does Credit Card Processing Cost: Simplified
If you’d rather not go through the lengthy calculations, here are some very general averages:
Retail Card-Present- 2.25% per swipe
Online Card-Not-Present- 2.5% per transaction
Also, on average, you’ll pay more for transactions using American Express. Through PayFrog, however, this isn’t the case.
Effective Rate
For those looking for an exact calculation of how much does credit card processing costs, let’s find your effective rate. You can find this by taking your total cost for processing cards divided by your total sales from card transactions. It considers every nickel and dime you’re charged to see if processing cards is worth it to you.
Questions Answered
Questions such as “What is your average ticket size”, and “Do your customers use debit or credit?” are important because they can drastically increase your effective rate. Average ticket size is often dictated whether your customers will use debit or credit. Credit is typically used for larger purchases, while debit is used for small ones. The lower the average ticket size, typically the lower the transaction fees you’ll be paying.
Furthermore, here’s an easy equation to calculate how much of your percent of monthly sales volume goes towards transaction fees (effective rate):
(Monthly Processing Volume/Average Ticket Size)*Total Transaction Fee = X
Take X and divide it by your total processing volume, then multiply by 100.
Not a Mathematician?
Don’t worry! We’re happy to do the math for you. If you’d like to speak to a sales representative directly or schedule a meeting to discuss how much does credit card processing costs for you, contact us here. If you’re looking for more information about how PayFrog’s pricing works the check out our pricing page.
