Credit Card Processing Fees: What You Need To Know (2025)

Years of research confirms that customers spend significantly more when paying with credit cards than they do when paying by cash or check. 

The psychology is simple: inserting, tapping, or swiping a credit card is quick and easy regardless of the amount, and feels less painful than counting out your hard-earned cash, or writing down the full figure on a check (not that there’s a whole lot of check-writing going on in modern retail to begin with). 

Given the consumer mindset, taking credit card payments is a no-brainer for retailers, from corner shops to global retail chains. In fact, it’s not at all uncommon these days to encounter coffee shops, eateries, and other businesses that only accept cards.

But there’s a hitch to all this convenience: your business pays fees on every credit card transaction. To be clear, that’s the seller, not the buyer, paying the fees. And these fees add up, especially for small businesses and new retailers trying to get off the ground, when every dollar counts.

Here’s a rundown of the different types of credit card transaction fees, plus tips for keeping them from ballooning out of control.

What are credit card processing fees?

Credit card processing fees are transaction fees that businesses pay to credit card companies, payment processors, and the financial institutions backing credit purchases. Merchants pay these credit card fees every time someone uses a credit card to buy something from them.

There are three main types of fees:

1. Interchange fees (the issuing bank’s cut)

Paid to the cardholder’s bank, the interchange fee takes the biggest cut out of every card sale. Rates vary by card type and risk, but typically range from 1% to 3% of the transaction amount. 

Discover and American Express run their own networks, so their interchange is usually higher, which is why some retailers stick to Visa and Mastercard only. 

Credit card issuers often factor security considerations into their fee structures. For example, chip credit cards often carry lower fraud risk than mag-stripe-only cards, and therefore can have lower fees associated.

2. Assessment fees (the card network’s cut)

Assessment fees, also known as network fees, go to Visa, Mastercard, Discover, or American Express for routing the transaction. Also charged as a percentage of the purchase amount, these fees are significantly lower than interchange fees, coming in at roughly 0.15%–0.25% of the cost. The rates are fixed by each network and apply to every sale, regardless of the issuing bank for the card or the processor.

3. Processor markup (the payment processor’s cut)

A payment processor takes care of the technical part of processing electronic payments, acting as an intermediary between the buyer, the seller, and any institutions involved, facilitating the transfer of funds in the correct amount to each party. Payment processors like Shopify Payments, Stripe, and PayPal, add their markup on top of the interchange and assessment fees. This can be a flat fee, a percentage, a monthly subscription, or a combination of all three, covering services such as gateway access, fraud-prevention tools, and customer support.

Average credit card processing fees in 2025

According to analysts, retailers spend an average of 1.70% to 2.5% of the total amount of any purchase on credit card processing fees—depending on factors like the type of credit card used, the transaction amount, and type of business. 

Credit card processing fees by vendor

Shopify Payments

Shopify Payments is Shopify's native payment processing solution that integrates directly with your store's checkout. 

It allows businesses to accept payments from retail payment options including credit cards, debit cards,tap to pay, contactless payments, and buy now, pay later (BNPL), without the need to engage third-party payment processors. Plus, it’s available across multiple countries and eliminates the additional transaction fees typically charged when using external payment processors.

Since your data is stored in a centralized dashboard, you can track transactions, handle payouts, and manage chargebacks, streamlining your financial processes in one place. As a Shopify retailer, data from Shopify Payment transactions seamlessly integrates with the rest of the data in your store.

The system maintains consistent rates, offers predictable payouts, and adheres to PCI compliance and EMV standards for all card readers. This ensures secure transactions for both merchants and customers.

Pricing structure: Shopify Payments is included in all Shopify plans at no additional cost.

Processing fees:

• In-person payments: Basic plan charges 2.6% plus $0.10 per transaction; Grow charges 2.5% + $0.10; Advanced 2.4% + $0.10
• Online transactions: Range from 2.5% to 2.9% plus $0.30 per transaction, depending on your plan level 
• Currency conversion fees (international sellers): 1.5% for US-based stores and 2% for stores in other regions 

Additional costs: There are no monthly fees, hidden fees, setup fees, or additional transaction fees that are typically charged by third-party payment providers.

💡TIP: You can secure lower processing fees for credit card transactions by upgrading your subscription with Shopify.

PayPal

PayPal offers merchants a straightforward way to accept credit cards, debit cards, and digital wallets like Apple Pay and Google Wallet online and in-person. 

Unlike traditional processors, PayPal removes complex fee structures and long-term contracts. You can process transactions through PayPal Zettle, online checkout options, digital invoices, or virtual terminals across sales channels without switching between different payment systems or providers.

Pricing structure: No monthly fees, statement fees, or early termination penalties

Processing fees: 2.29% + $0.09 for in-person transactions and 2.99% + $0.49 for online transactions 

Additional costs: 

• Chargeback fees: $20 per incident
• Cross-border fees: 1.5% + 4% for currency conversion when accepting international payments
• Optional services: Recurring billing $10/month, advanced fraud protection $10/month + $0.07 per transaction

Square

Square is an all-in-one payment-processing solution that allows retailers to take in-store, online, and mobile payments. The system works by connecting to Square's payment gateway, using a card reader for in-person transactions or payment portal for online sales to process transactions. 

When a customer pays, Square verifies funds with their bank, approves the transaction, and deposits money into your merchant account. And with its next-day deposits, you won’t have to endure waiting periods typical with traditional processors. Square also offers transparent pricing with bundled fees, making it simpler to understand costs. 

Pricing structure:

• Free: $0
• Plus: $89/month
• Premium: Custom pricing

Processing fees: Varies based on the plan:

• Free: 2.6% + $0.15 in-person transactions, 2.9% + $0.30 for online transactions
• Plus: 2.5% + $0.10 for in-person transactions, 2.9% + $0.30 for online transactions
• Premium: Custom pricing

Additional costs: No monthly fees, statement fees, PCI compliance fees, or early termination penalties

Stripe

Stripe is designed primarily for online businesses, but it also supports in-person payments through Stripe Terminal. The system works as an intermediary between merchants and customers' banks, validating transactions and moving funds securely between accounts. 

It supports dozens of payment methods and more than 135 currencies, and operates on a straightforward flat-rate pricing model—with no setup fees or early termination penalties.

Pricing structure: Pay-as-you-go pricing

Processing fees:

• Domestic cards: 2.9% + $0.30 per successful charge
• International cards: 1.5% per successful charge
• Manually entered cards: additional 0.5% per successful charge
• Custom pricing available for merchants with large payments volume or unique business models

Additional costs: 1% + $0.30 for cross-border transactions and +1% if currency conversion is required

Helcim

Helcim is designed to help small businesses save money while accepting both in-person and online payments. The platform uses interchange plus-pricing, which combines the base cost from card networks with a single markup. 

There are no monthly fees, user fees, setup fees, deposit fees, PCI fees, or cancellation penalties. And with Helcim’s Fee Saver, merchants can pass credit card processing costs to customers who choose credit cards over cheaper payment methods like debit or ACH. This gives merchants access to free credit card processing while remaining compliant with card network rules. 

Pricing structure: No subscription

Processing fees:

• In-person transactions: 1.83% + $0.08
• Online payments: 2.61% + $0.08
• Discounts available for high-volume transactions based on business needs and volume of transactions processed

Additional costs:

• $15 fee for chargebacks (Helcim will reimburse it if you win the dispute)
• Currency conversion fee of 1% above the daily 5 pm ET market rate for merchants using Helcim’s multi-currency processing (MCP) service

Finix 

Finix helps US and Canadian businesses process in-person and online transactions. It operates on an interchange and subscription model with flexible fee-customization options for optimizing your payment revenue and margins. 

These options include international charge adjustments, transaction volume discounts, payment method-specific fees, and accelerated settlement timeframes. The processor doesn’t charge any extra fees for PCI compliance, setup or fraud protection tools.

Pricing structure: Individual merchants plan: Processing subscription tier starts at $250 monthly for businesses processing up to $1 million annually

Processing fees: $0.08 for card-present transactions and $0.15 for card-not-present transactions. Custom rates apply for businesses processing more than $1 million annually.

Additional costs:

• 1% for same-day deposits
• $15 for disputes

Common additional processing fees

In addition to the standard processing fees they advertise, many credit card processors find ways to sneak in additional, hidden charges. These extra costs can have you paying thousands of dollars annually in unnecessary charges that silently eat away at your bottom line, while providing you with no additional benefit.

Hidden fees retailers should be well aware of include the following:

• Early termination fees: Some processors charge merchants a fee for canceling their contract early. (You’re already dissatisfied with their services, so why not grab a few bucks on the way out the door?)
• Batch processing fees: These are fees for processing multiple transactions at once. 
• PCI noncompliance fees: Some payment processors charge significant additional fees to retailers as a penalty for failing to adhere to PCI DSS security standards.
• Cross-border and currency conversion fees: Some payment-processing companies add on these extra fees for foreign transactions. Since expanding to other global markets can be a huge driver of growth for your business, the last thing you need is cost-prohibitive transaction fees shutting down the borders of your expansion plans. 
• Refund fees: Some processors keep part of the transaction fee even if a refund is issued. While returns are never the goal, you generally don’t want to penalize your customers when they have to make that choice—so why should you pay a penalty? 

Be sure to dig deep in your search for any and all hidden fees when evaluating payment processors. Once you’re in business, review your statements to ensure nothing unexpected shows up. Careful provider selection and regular statement audits can help you identify costly hidden fees that erode profit margins, allowing you to reclaim thousands in unnecessary payment processing costs and redirect it to growth-focused initiatives that generate returns instead of padding processor profits.

Beyond just hurting your bottom line, hidden fees can harm the trust relationship that is so important when it comes to handling your money. For better peace of mind, go with a payment processor like Shopify Payments that’s committed to helping you run your business with no hidden fees.

Understanding the three pricing models

Flat-rate pricing

You pay one blended rate (e.g., 2.6 % + $0.15) that includes interchange, assessment, and processor fees.

A predictable rate means you know exactly how much you’re spending each time. Flat-rate pricing is popular among all-in-one providers like Shopify Payments due to its simplicity for businesses. 

Interchange-plus pricing

The processor passes through the exact interchange and assessment fees set by the card networks, adding a small markup of its own, usually a small percentage or transaction fee.

Interchange-plus is seen as the most transparent and cost-efficient model. Your effective rate varies by card type and risk, but large-volume merchants benefit from paying the trust cost on a transaction. 

If shoppers use lower-cost debit or credit cards, the business retains the savings by avoiding a higher blended rate. 

Tiered pricing

Each transaction is routed into one of three preset buckets: “qualified,” “mid-qualified,” or “non-qualified,” each with its own corresponding rate. If a sale fails to meet the strict criteria for the cheapest tier—for example, if the card is keyed in rather than dipped—the transaction is downgraded, and you pay more.

Statements under this more complicated model are harder to audit, and total cost often skews higher, which is why people view tiered plans as processor-friendly rather than retailer-friendly.

How to read your processing statement and calculate your effective rate

Credit card fees can pile up and eat into your net profits. So, you want to ensure you’re working with a provider that’s affordable, reliable, and transparent. One way to do this is by calculating your effective rate, or the real cost of processing credit card payments.

Review your monthly statement and add up:

• Total processing fees
• Total card sales 

Then apply the formula: Effective rate = Total processing fees ÷ Total sales

For example, if you paid $1,240 in fees on $50,000 in card sales, your effective rate is $1,240 ÷ $50,000 = 2.48%. 

There's no single number that defines what a good or bad effective rate is. However, it’s generally accepted that the normal range is between 1.6% and 3.1%, with most rates falling around 2%–2.5%.

Working with merchant service providers

The fees related to accepting credit cards can be overwhelming, especially for solo entrepreneurs. That’s why you may choose to partner with a merchant service provider that will calculate and remit almost all fees on your behalf. 

A merchant service provider is essentially a credit card processing provider that acts as an intermediary between your business, your customers, and financial institutions. 

It does this, in part, by maintaining a merchant account through which funds pass on their way from your customer’s credit card to your bank account. You’ll pay merchant account fees, which are usually baked into your overall merchant service fees.

Four strategies to reduce your credit card processing fees

1. Choose the right pricing model for your business

Match the pricing model to your ticket size and volume. 

• Low-ticket, low-volume merchants often save with flat-rate plans (one blended % + small fixed fee).
• Higher-volume merchants usually pay less on interchange-plus, where the markup sits on top of actual card network costs.

Calculate your current effective rate. If it’s more than 0.30 percentage points above the provider’s advertised flat rate, consider getting quotes for interchange-plus.

2. Minimize chargebacks

When customers dispute a charge from your business, their credit card company may issue them a refund and then dock you with a chargeback fee, which can often exceed $100. Scammers disputing genuine charges can be the downfall of your business—they get your product for free, and you get buried under chargeback fees.

Some ways to minimize chargebacks are:

• Tighten fraud filters. Enable AVS and CVV checks and flag mismatched billing addresses before capture.
• Use clear billing descriptors. “Store Name – Downtown” reduces “unrecognized charge” disputes.
• Document delivery. Keep signed receipts or proof-of-delivery screenshots, and upload them promptly when a dispute arises.
• Respond fast. Processors often close cases in your favor if evidence is submitted within 48 hours.

💡Tip: Let Shopify Payments fight for you. For any order processed through Shopify Payments, Shopify auto-collects order evidence and submits it on the due date. You can add extra documents in admin if needed. Having a trusted company like Shopify in your corner can make a big difference.

For extra protection, you can also turn on Shopify Protect for Shop Pay orders. Shopify reimburses the disputed amount and the chargeback fee for eligible fraud claims and handles the dispute on your behalf.

3. Negotiate with your processor

Many small business owners are unaware that they have the ability to negotiate lower fees with their card processors and acquiring banks. Whether you do it yourself or hire a professional on your behalf, ask about getting a lower acquirer processing fee or a lower commission on each purchase. If a bank adds charges like a “convenience fee” that you don’t understand, ask for them to be waived. 

4. Encourage lower-cost payment methods

A debit card transaction almost always costs a merchant less than a credit card transaction—often less than 1% of the total purchase price. 

This is mainly due to the fact that banks charge higher interchange fees on credit purchases than debit purchases. Accepting debit cards still gives consumers the convenience of swiping or tapping a card while making a purchase.

💡 Tip: Selling on the go? Take credit card payments by phone without extra hardware with Shopify’s Tap to Pay.