“What are Typical Credit Card Processing Fees?”
There are dozens of different fees associated with credit card processing, and that’s probably why you’re here…to make sense of them all! If you’re wondering what are typical credit card processing fees, it truly depends on your business, how you’ll be processing cards, and what provider you go with. We’ll go over what are typical credit card processing fees for merchant account providers and what you might expect to pay.
Typical Fee Type
There are three types of fees associated with card processing transactions: transactional, incidental, and flat.
Every time your business runs a transaction, this type of fee occurs. Transactional fees types would include an authorization fee, a batch fee, a discount rate, or an interchange fee.
- Authorization Fee: This is charged every time you attempt a sale. You’re billed for every approval and every decline. Typical Fee: $0.07 – $0.35
- Batch: A batch is processed once every day that you have credit card sales. Typical fee: $0.07 – $0.35
- Discount Rate: This is billed as a percentage of an approved sale amount. Typical Fee: 0.75% – 2.09%
- Interchange Fees: Explained more below. Typical Fees:
- Debit: 0.05% + $0.22
- Swiped Retail: 1.51% + $0.10
- E-Commerce: 1.8% + $0.10
Non-Sufficient Funds, Retrieval Requests, Chargebacks, and Address Verification Fees are all examples of incidental fees. They happen only so often and are often avoidable.
- Non-Sufficient Funds (NSF): When the processor bills your checking account for the processing fees at the end of the month and there are inadequate funds in your bank account to cover the charge. Typical fee: $25
- Retrieval request: The first step of the chargeback process. After your customer disputes your charge to their credit card with their card issuing bank, you’ll be sent a retieval request to provide a signature of the cardholder’s authorization, an invoice or receipt, and proof of delevery of your goods or services. Typical Fee: $25
- Chargeback Fee: After the retrieval request process, a chargeback will occur if you lose the dispute. The disputed funds will go back to the cardholder and you’ll be charged a fee. Typical Fee: $25
- Address Verification: When a card is manually key entered, a processor can check the billing street address and zip code for accuracy to see if it is a match. Typical Fee: $0.05 – $0.10
These are similar to Incidental in the way that are not necessarily charged every transaction. They can be tacked on monthly or annually for general cost of keeping up your merchant account, or are added for instances like early termination of a contract.
- PCI Compliance Fee: A fee to pay a Qualified Security Assessor to provide self-analyzing tools to monitor compliance with the Payment Card Industry security standards. Typical fee: $99 – $125 per year
- PCI Non-Compliance Fine: A monthly fine for each month that you fail to certify your compliance through a Qualified Security Assessor.
- Monthly Minimum: If your business does not meet the minimum sales goal or processing fee amount set by your payment processor, you will be charged. Typical Fee: $25 – $35
- Statement/Customer Service: Billed monthly just to keep your account open. $10 – $15 monthly
- Gateway: Billed monthly to give you electronic access to process transactions on a computer or website. Typical Fee: $10 – $15 monthly
- IRS Reporting: Billed monthly to fulfill the IRS mandated reporting requirement of processors to issue an annual Form 1099-K (gross credit card processing deposits). Typical Fee: $5 monthly
Interchange fees are the amounts that the card issuing bank receives for the transaction. This is how they can afford to pay cardholders in points or airline miles when making purchases. Card Network Fees go to pay the card brands, and all other fees go to pay the processor. If you have a card not present, or an online/eCommerce business, you will typically pay more for interchange fees because the risk is higher for those transactions. These three fee players determine what are typical credit card processing fees and explain why you usually end up carrying most of the weight.
Don’t give up on processing cards for your business! These fees are just a broad overview and they don’t always get billed. You need a transparent and honest merchant account provider to help you understand and avoid them. If you’re looking for a fair deal on credit card processing, we have a premium offer for new businesses to get started with. Or if you’re the type to shop around and compare prices, we can match or beat any other competitor’s written offer.