Credit Card Processing Fees Explained (2025): Real SMB Averages, By Method & Card

KEY TAKEAWAYS

1. Your total cost = interchange + network assessments + processor markup; card type and channel (in‑person vs. online) drive the mix.
2. Compute your effective rate from any monthly statement and benchmark it before negotiating.
3. Lower costs by favoring EMV/tap, enabling online debit routing, improving online data quality, and using ACH for large invoices.

Summary

Your total “rate” is really the merchant discount rate (MDR): interchange set by the card networks, network assessments, and your processor’s markup. MDR commonly lands between roughly 1% and 3% overall, but the mix depends on how you accept payments and which cards your customers use.

How fees are built

Interchange is paid to the issuing bank and varies by brand, card type (debit vs. credit; rewards vs. non‑rewards; consumer vs. commercial), and risk (in‑person vs. online). Assessments are small network charges added on top. Your processor then adds a markup, either as interchange‑plus (a small percentage and per‑transaction cents over interchange), a flat rate, or a tiered/qualified model.

Channel and card type matter

In‑person EMV/tap transactions tend to be cheaper because fraud risk is lower and data quality is better. Keyed and online transactions are usually costlier. Debit can be significantly cheaper than credit, especially for regulated debit from large issuers, and you should make sure you’re taking advantage of online debit routing improvements (see Article #10).

How to compute your true “effective rate”

Grab a monthly statement, add every fee line (processing, monthly, PCI, gateway, chargebacks), divide by gross card sales, and multiply by 100. If you’re mostly in‑person and your effective rate is consistently above ~3%, it’s a signal to review pricing, routing, or data quality.

Practical ways to lower cost

Prefer EMV/tap instead of manually keying; enable online debit routing and PINless debit support where possible; send complete data for online transactions and consider ACH for large invoices or recurring payments.

Pricing models—what changes the math

Interchange‑plus adapts cleanly as your mix shifts and makes it easier to see where costs come from. Flat rate is simple and fine for low/seasonal volume but often overpays on regulated debit. Tiered pricing is the hardest to audit because “non‑qualified” buckets can mask margin.

When to consider switching

You can’t change the networks’ interchange tables, but you can negotiate markup, fix data quality, use debit routing online, and move certain payments to ACH. If your effective rate stays high after these fixes, gather competing quotes.