Credit Card Processing Fees: What Small Business Owners Need to Know


The payment industry is notorious for having a large number of credit card processing fees that can often be hard to decipher, even for some specialists, let alone merchants. This complexity, however, shouldn’t deter small business owners from wanting to get a better understanding of what they are paying for. Here’s what small business owners should know:

Interchange Cost

Interchange fees are set by major card associations like Visa, MasterCard and Discover, with the former two changing theirs every April and October. This is the base cost for processing credit and debit cards. While payment processors have no control over it, some may attempt to “pad” it and present it as true interchange. Spotting this can be tough and requires the help of an experienced credit card processing specialist.

Markup Rate

Just like most businesses, merchant services providers charge additional fees on top of the interchange cost to make a profit. The issue is that not all of these fees are fair or even necessary for that matter. Some payment processors repeatedly take advantage of their merchants by using hidden costs to increase their margin. To avoid this headache, it’s best to select a transparent pricing model, like interchange plus, which shows the processor’s markup in the form of a small amount of basis points and a transaction fee.

PCI Compliance

With the amount of credit card fraud occurring in the U.S. and the frequency with which scammers target small businesses, there’s no doubt that you should become PCI compliant. While it does involve a small fee, think of it as a cost of doing business. Also keep in mind that fees for not fulfilling PCI requirements are often higher than the cost to become PCI compliant, not to mention the much greater cost of facing fraud without such compliance. 

The above mentioned fees are only a few of the dozens of fees that your small business may encounter. Since there’s no way to truly tell whether you are in a good spot without first taking a careful look at the breakdown of your fees, TransNational Payments offers a free statement analysis to all merchants. Our team of payment experts has helped thousands of owners with small business credit card processing and would be glad to see if we can put you in a better position as well.

Save On Credit Card Processing