Credit Card Processing Fees: Everything You Need to Know

merchant services

Did you know that over 180 million people in the U.S. have one or more credit cards? There are over a billion of them in use. It’s safe to say that if your business doesn’t accept cards, you’re missing out on a lot of money. The problem is that you’ll pay for merchant services. 

Most credit card processing companies charge a fee when someone swipes their card to pay for goods and services.

There are ways you can reduce these fees. The first step is understanding them. Continue reading to learn more about credit processing fees and saving money. 

What Are Credit Card Processing Fees? 

When someone swipes their card at a place of business, a credit card processor serves as a middleman to complete the transaction. They charge the merchant a fee for their services. 

How the merchant is charged depends on the pricing model they choose. It comes in three forms:

  • General card processing fee: a charge based on the total amount of a customer’s purchase
  • Per transaction fee: a flat charge that’s the same for every transaction
  • Monthly fees: a flat charge that covers an entire month of payment processing services

Each of these payment options comes with pros and cons. Some companies bundle monthly payment packages with other services. 

Types of Processing Fees 

There are three different types of processing fees you should be aware of when shopping around for a merchant processor. 

These are interchange, assessment, and payment processor fees. Their costs can vary based on the types of cards a business accepts. 

Interchange Fees

Interchange fees happen when a customer swipes their card. The payment goes to the issuer of the card. 

The charge can vary from credit card company to credit card company. Some charge higher interchange fees for internet-based purchases due to the risk of fraud. 

Assessment Fees

Assessment fees go to the credit card network. This connects merchants to banks and allows them to take certain types of cards. 

These fees don’t happen at checkout. Merchants are instead charged a monthly fee. 

Payment Processor Fees

Payment processor fees go to the merchant processor that facilitates the transaction.

As stated above, they take it out as a flat fee, monthly payment, or a percentage of the customer’s purchase. 

How to Reduce the Cost for Credit Card Processing

Do you feel like your credit card processing fees are a bit high? You can reduce your charges. 

You’ll need to compare prices, negotiate costs, and go out of your way to minimize chargebacks and fraud risks. 

Transaction Frequency

When comparing prices, consider how many transactions your business processes every month.

If you’re a large corporation that sees a lot of card swipes, choosing a company that charges monthly but offers lower transaction fees may save you money in the long run. The opposite is true if you’re operating a smaller organization.  


Many payment processing companies and banks are up for negotiation when it comes to fees. If there is a convenience fee that you don’t understand, you may be able to get it waived or explained to you in better detail. 

You can either negotiate the charges yourself or hire a professional to handle it on behalf of your company. 

Minimize Chargebacks 

Chargebacks happen when a cardholder disputes a charge on their account. Many confuse this with a refund, but they aren’t the same thing. 

The funds are pulled from your business account while the credit card company investigates the charge. The company will issue a chargeback fee, which will add to your payment processing costs. 

To limit chargeback costs, you’ll need to practice proper inventory management. If a customer can buy an item that’s out of stock, they’re likely to issue a chargeback. 

You also have to be careful with your product descriptions. If a customer feels like the item they received differs from what was advertised, they’ll call their bank. 

If you offer a free trial of your goods and services, don’t automatically charge customers when it ends. This almost always results in a chargeback. 

Reduce the Risk of Fraud

If you’re a high-risk merchant, that will increase your credit card processing fees. 

Again, online purchases are seen as risky. Encourage customers to make purchases in person with in-store deals. 

Asking for security information such as a zip code or the security code on the back of the credit card will also limit risk and lower costs. 

Encourage the Use of Debit Cards 

Debit card transactions are cheaper for merchants than credit cards because the interchange fees are lower. 

You can encourage customers to use a debit card by issuing surcharges for credit card purchases. Using a debit card will allow them to avoid extra fees while still giving them the convenience of paying by card. 

Accept ACH payments

ACH payments come from a customer’s bank account instead of a card. There are a few reasons why you should consider these types of payments. 

The first is that they’re fast and reliable. The second is that they don’t come with interchange fees. 

Be PCI Compliant 

PCI is a set of rules and regulations that protect sensitive credit card information. Most processing services give merchants a set amount of time to become PCI compliant

If you take too long, your processing company will charge you an extra fee until you are compliant. 

Being compliant won’t only help you avoid extra fees. It will also limit your company’s fraud risk.

Some PCI providers will offer your business breach protection. This will cover you if a cyberattack happens and a customer’s data is lost. 

Understanding the Cost of Merchant Services

The cost of merchant services can vary, depending on several factors. Credit card processing companies charge a number of fees. Being a risky business will increase these fees. 

You can reduce the charges by being PCI compliant and reducing your risk for fraud and chargebacks. 

Trinity Payments offers transparent processing payments with no hidden charges. Contact us to learn more about what we can do for you.

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If you’re in the market for a new payments partner, want to upgrade your systems, or just need to ask a few questions, our dedicated team is here to help. Try us on for size.