![]() Interchange rates typically combine a percentage of the sale with a fixed fee per transaction-for example, 1.58% + $0.10. Interchange fees are “swipe fees” you’ll pay on every card payment you receive. We’ll discuss each type of credit card processing fee in detail below. The interchange fee goes to your customer’s card issuing bank, and the assessment fees go to the credit card network. Wholesale fees are determined by the various credit card networks, such as Visa, Mastercard, American Express, and Discover, and they come in two forms: interchange fees and assessments. They’re commonly called “wholesale” or “base costs” because neither you nor your credit card processor have any control over the rates you’ll pay. Wholesale fees make up the bulk of the transaction fees for any given credit card transaction. Markups are fees paid to your credit card processor on each transaction. Wholesale fees include interchange fees paid to card issuing banks and assessment fees paid to the various credit card networks. Wholesale fees (also called base costs):.They go to whichever financial institution performed the service that generated the fee, including your customers’ card issuing banks and credit card networks like Visa and Mastercard.Īt the most basic level, we can break down the credit card processing fees into the following general categories: Types of Processing FeesĮven though you’ll typically only pay your payment processor directly, most of the credit card processing fees you’ll pay don’t go to your payment processor. After all, every business that wants to accept credit card payments needs to choose a credit card processor or “payment processor” (the terms mean the same thing), and it can be hard to judge between your options without understanding the fees you’ll have to pay. This is why figuring out how credit card processing fees work brings practical advantages to any business. Banks and credit card networks will still control the bulk of your credit card processing fees. But no matter where you sign up for credit card processing, a salesperson can only influence the last 5% of the credit card fees you’ll pay. Your best bet is to sign up with a salesperson who lets you have a decent contract and tries to minimize your overall costs-a service Corporate Tools® can provide. But this is also where most businesses get screwed because they don’t understand how credit card transaction fees actually work. It’s the other 5% of your overall costs that provides at least some leeway to negotiate fees. Unless you’re a Walmart- or Amazon-level powerhouse, 95% of your overall costs are set and controlled with an iron fist by a few massive corporations. What’s surprising is how complicated those fees can be, and how few of the credit card transaction fees you’ll pay can actually be negotiated and changed. ![]() ![]() With so many moving parts, it’s no surprise that credit card processing generates a host of services and transaction fees. But, if you’ve read the Corporate Tools® guide to the Credit Card Payment Process, you already know that it takes a lot of players to make the credit card payment process work, including card issuing banks, credit card processors, and credit card networks. How Corporate Tools® Can Help What are Credit Card Processing Fees?Ĭredit card processing fees are essentially just service fees. ![]()
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