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The Story Behind Rising Credit Card Fees

Credit card processing companies cite increases in online purchases and the added card fraud risk as reasons for increasing interchange fees. While true, it is not the whole story. In the background, card issuers have been offering lavish travel perks and cashback bonuses, which, too, carry higher payment processing fees.

Credit cards cost 2x more to process than debit cards due to customer travel perks and cashback. The merchant is paying for all their customer’s rewards.

“The cost of credit card processing has been on the rise in recent years as premium cards, which have heftier fees, grow in popularity among consumers.”

Forbes, February, 14 2020

92% of credit card transactions are on premium/rewards cards, resulting in ever-higher merchant payment fees.

Wall Street Journal, January 18, 2018

What Can You Do?

You can shift all or some of the payment processing costs to the cardholder. The cardholder is choosing to use their premium credit card for the perks; you can offer them the choice of choosing a lower-cost method to pay without a fee or paying a small fee to use a high-cost credit card. Consumers already pay a fee for using credit at the pump, so why should your POS be any different?

IntelliPay Advantage — Reduced and No-Cost Solutions

A one-size-fits-all payment solution doesn’t work for all businesses and verticals. Each business and vertical has unique needs and only IntelliPay offers a range of solutions in addition to a low-cost, traditional, merchant-pays-the-fees, processing solution. All our solutions are 100% compliant and in use by thousands of merchants. Each solution will help you reduce costs and improve margins.

No-Cost Solutions

  • Service Fee
  • Site Fee

Service Fee

An alternative fee-based program for Government and Higher Education institutions enables these organizations to charge a fixed or variable fee on all online or in-person credit or debit transactions.

Your organization gets the invoice amount due, and IntelliPay collects the service fee, pays the processing costs, and manages the merchant account for you.


  • Add a fee to the amount due
  • Deposits invoice amount into your account
  • Deposits fee into IntelliPay’s account
  • Displays fee before payment

Does Not

  • Apply to all government payments
  • Prohibit fees to vary by tender type
  • Limit payment channels
  • Recurring transactions eligible
Service fee processing
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Please contact a consultant to see how since 2004, IntelliPay has been helping governments of all sizes save even more time and money by using other fee-based options for non-qualifying transactions.

Site Fee

IntelliPay’s Outsourced Website or “Site” Fee Program adds an up to 4% fee to the customer’s amount due, billing them for the customer support, website hosting, software, and processing fees.

Our Site Fee Model bridges the gap for merchants that can’t or don’t want to offer credit cards and customers who are requesting the ability to pay with their credit cards. Site Fee is an alternative fee-based program that enables IntelliPay to charge a separate fee (percentage or flat) to the customer for using our services, software, maintenance, processing, and Level 1 customer support that we provide on behalf of the merchant.


  • Add a fee to the amount due
  • Deposits invoice amount into your account
  • Deposits fee into IntelliPay’s account
  • Displays fee before payment so customers are informed and can approve

Does Not

  • Deposit the fee amount into your bank account
  • Bill you for transaction costs
  • Interfere with compliance rules because it’s our hosted web (site) for our services

Visit our Site Fee page to learn more about the advantages of Site Fee payment processing.

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Start on the road to higher margins with Site Fee; talk with a consultant today.

Cost-Reduction Solutions

  • FairPay
  • Convenience Fee
  • Shared Fee


Stop paying for your customers’ perks and vacations. Use our FairPay program and balance the scales. If your customers pay with a credit card, let them pay for their rewards. If they pay with a debit card, you pay for the processing fees (which is typically 2-3% lower than credit card fees.) FairPay is the fairest, 100% compliant surcharging program in the market!


  • FairPay adds a 3-4% fee when someone uses their credit card that’s tied to a rewards program.

Does Not

  • FairPay doesn’t add the fee when someone uses their debit card that’s tied to a bank account (no rewards).

Visit our FairPay page to calculate your payment processing savings using FairPay.

Get your questions answered. FairPay FAQs

Fairpay Fee Processing Graphic
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Stop paying for your customer’s cash back rewards and airline miles with your margins.  Get started with FairPay today.

Convenience Fee

IntelliPay’s Convenience Fee Model is for merchants that want to offset their merchant processing fees. Our solution is 100% compatible with Visa/MC Convenience Fee Processing program.

The Convenience Fee Model enables the merchant to charge a flat fee levied for the privilege of paying for a product or service using an alternative payment channel or a payment method that is not standard for the merchant.  For example, theatres are selling tickets online versus in their lobby.


  • Support all credit and debit cards
  • Add a flat fee to the amount due                   
  • Combine the fee and the amount due into one payment
  • Apply to online, pay-by-phone, and other digital (card not present) transactions
  • Deposit invoice amount into your account
  • Reduce merchants processing costs
  • Require merchant to offer an option that does not charge a fee

Does Not

  • Apply to in-person (card present) transactions
  • Separate amount due and fee
  • Permit a fee that is a percentage of the transaction
  • Talk with an Intellipay consultant about how convenience fee processing can reduce payment processing costs for your organization.
Convenience Fee Payment Processing
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To learn how convenience fee payment processing can boost your margins, talk with a consultant today.

Shared Fee

Our Shared Fee Model is an alternative fee-based program that enables IntelliPay to charge a fee (percentage or flat) to the customer for using our software or technology and charge a low fee to the merchant.

In this model, IntelliPay bills both the customer and the merchant to “share” in the payment processing fees. There is a low, separate fee charged to the customer for software, maintenance, processing, and customer support and a low interchange + processing fee charged to the merchant.

By sharing the fees between the two parties, both can use and accept credit card processing at affordable rates.


  • Support credit card digital (card not present) transactions
  • Charge a fee to the customer and a low fee to the merchant
  • Lower merchant processing costs
  • Deposit the invoice amount into your bank account
  • Deposit fee into IntelliPay’s account
  • Display fee before the payment

Does Not

  • Deposit fee account into your bank account
  • Support debit card transactions
  • Require the customer to pay for all the processing costs of the transaction
IntelliPay Shared Fee Processing
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For merchants that do not want to put all of the costs of technology and processing on to their customers and wish to share in carrying the load, the shared fee program is a perfect match.  Please talk to a consultant to get started with shared fee processing today.

Traditional Fee

  • Traditional Fee

Traditional Fee

This is the way most merchants accept payments today. No fees are assessed to the customer, and the merchant is responsible for all interchange, dues, assessments, PCI, and gateway fees on all online and in-person transactions.


  • Support all payment card types
  • Works with in-person (card present) and digital (card not present) transactions
  • Have different fees by card and transaction type
  • Deposit the invoice amount into your account

Does Not

  • Share processing costs with customers
  • Interfere with compliance rules
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While this may not be considered an alternative fee-based solution, we still want to provide alternative pricing models to fit our client’s needs. Please contact a consultant to see how IntelliPay can save you money on all your processing needs.

The Right Solution for My Business

The choice of a payment solution for your business shouldn’t be overwhelming, although it doesn’t have to be. At IntelliPay, we lay out all your options side by side below to make comparison and the right decision easier. Reach out to our team with questions!

Payment Model Comparison


  1. Government & Education Merchants. Eligible MCC’s 8211; 8220; 8244; 8249; 9211; 9222; 9311; 9399. Merchant registration with Visa required.
  2. Utility receives the billed funds, IntelliPay receives the fee to pay merchant processing costs and for account management.
  3. IntelliPay receives the Site Fee and uses the funds to pay the merchant’s processing fees.
  4. The fee cannot exceed 4.00% (2.00% in CO) of the transaction. Notices must be placed at Point of Entry and Point of Sale. Debit and Pre-Paid cards not permitted. Prohibited in CT and MA.  Merchant registration with card associations is required.
  5. Must be a flat fee combined into one singular payment. For card-not-present transactions, transaction type cannot be customary to industry. Merchant must offer the customer an alternative payment option that does not charge a fee.
  6. Merchant pays a modest interchange and processing fee, cardholder shares in a fixed amount of the processing cost.
  7. This is the traditional model that most merchants use today. Merchant pays for all processing related costs on each transaction.