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Accepting credit cards and paying credit card processing fees are an inevitable part of business. However, the structure and calculation of these fees can be complex and confusing. Please read below to learn what our experts at IntelliPay say about breaking down the basics of credit card processing fees so you can better understand how they work. 

Woman' completing a transaction. Every transaction has a cost. Businesses typically pay the costs or fees for payment acceptance or payment processing.

Interchange Fees

Card issuers charge fees to acquiring banks for processing transactions. These swipe or interchange fees range from 2.24 % to 4%, depending on the card type, payment method, and other factors. Online transactions using premium rewards or business credit cards have the highest fees.

Typically, merchants pay all these non-negotiable fees, which are reviewed (increased or changed) twice annually by the credit card brands (Visa, Mastercard, etc.). Swipe fees on credit cards alone are up 20% since 2021 and are often a business’s highest cost after labor.


Assessment Fees are on top of interchange fees charged by the card brands ( Visa, Mastercard) or associations and are non-negotiable.

Assessment Fees

On top of interchange fees, card brands (associations) such as Visa, Mastercard, Discover, and American Express charge assessment fees, aka NABU (Network Access and Brand Usage fees), to help fund various programs and initiatives. These fees are typically a small, fixed amount per transaction and are passed to merchants as part of their processing costs. Merchant services like IntelliPay can look at your card mix and types of transactions to help reduce your payment acceptance costs.


credit card payment - online payments made with premium rewards or business credit cards have the highest transaction fees.

Payment Gateway Fees

If you use payment gateways like PayPal to process card payments, you may also be charged a separate fee for this service. Payment gateway fees can be a monthly fee, a per-transaction fee, or a combination of both. Some well-known payment processors bundle all their fees into one rate; others charge a monthly subscription fee that hinders comparisons. IntelliPay provides a no-obligation analysis that helps merchants understand what they are paying per transaction, aiding comparisons among payment processors.

Service, Convenience and Surcharge Fees to the Rescue

Raging inflation have raised the costs of everything. However, government merchants can use service fees, and small business owners can use convenience and surcharge fees to easily pass on card processing fees to the customer and improve margins. Read our Real Costs of Credit Card processing here for a more detailed explanation of interchange and payment processing fees. 

Beware of Great Deals

As a business owner, you need to know how processing fees work and your actual cost of processing. Low teaser rates, tiered pricing, subscriptions, and all-in-one rates seem like great deals upfront that can hide your actual cost per transaction.

Great deals can come with hidden fees. Hidden fees that were buried in the fine print when you signed up suddenly appear on your statement. These hidden or junk fees are on top of your promised rates. Often, it is only teased out through a comprehensive analysis of monthly statements and everything you’re paying to get to your actual cost per transaction.
So, you need to go through your statements and calculate your processing costs to know whether you are getting a great deal.

Instead of causing yourself stress and headaches trying to figure out the intricacies of credit card processing fees, let us help. Contact us today for your free, no-obligation merchant statement analysis. We’ll do the hard work so you can get back to running your business.

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