The Ultimate 2025 Breakdown of Credit Card Processing Fees
Credit Card Processing Fees Demystified
Credit card processing fees typically range from 1.5% to 3.5% of each transaction, with an average of 2.24% per swipe. These fees are broken down into three main components:
- Interchange fees (1.15% to 2.50%) - Paid to the card-issuing bank
- Assessment fees (0.13% to 0.17%) - Paid to the card network (Visa, Mastercard, etc.)
- Payment processor markup (0.25% to 0.75%) - Paid to your payment processor
In 2023, U.S. merchants paid a staggering $135.75 billion in credit card processing fees, a cost that continues to rise in 2025.
Cash might have been king once, but today less than 10% of consumers pay with cash. As a small business owner, understanding these fees isn't just about knowledge—it's about protecting your profit margins.
Whether you operate a brick-and-mortar store or an online shop, these processing costs directly impact your bottom line. On a $100 sale, you're typically paying $1.50 to $3.50 just to accept a credit card payment.
I'm Lydia Valberg, co-owner of Merchant Payment Services with over 35 years of family experience helping businesses steer the complex world of credit card processing fees and find transparent, cost-effective payment solutions that protect their profits.
What Are Credit Card Processing Fees?
Credit card processing fees are what you pay as a business owner every time a customer pays with plastic. When that card gets swiped, tapped, or the number gets punched into your website, a whole financial relay race begins behind the scenes to make sure the money gets where it needs to go.
These aren't simple flat fees – they're more like a three-layer cake of charges that fund different parts of the payment ecosystem. Think of it as paying tolls to use the financial highways connecting your cash register to your customer's bank account.
For most businesses, these fees typically cost between 1.5% and 3.5% of each transaction, often with a small fixed fee (usually $0.10 to $0.30) tacked on. It might not sound like much, but for businesses in Ohio and Kentucky, these percentages can quickly grow into thousands of dollars leaving your bottom line each year.
Why Merchants Pay Them
Ever wonder why you're footing the bill for your customers' convenience? It's a fair question – especially when customers are the ones collecting airline miles and cash back rewards.
The truth is, merchants shoulder these costs for several important reasons:
Banks absorb financial risk with every swipe. When a customer uses their card, the bank is essentially providing you an instant loan – guaranteeing you get paid even if that customer never pays their credit card bill.
Fraud protection systems don't come cheap. Card networks invest heavily in security infrastructure that helps protect both your business and your customers from fraudulent charges.
Those tempting rewards programs that customers love? They're primarily funded by the interchange fees coming from your business account.
Payment networks require maintenance. The massive electronic systems enabling instant transactions across the globe need constant upkeep and improvement.
As one Cincinnati shop owner recently told me, "I used to just accept processing fees as an unavoidable expense. Now I see them as something I can actively manage to improve my profits."
Who Gets Paid and When
Following the money helps make sense of why these fees exist in the first place. Your processing fees get divided among three main players:
Issuing Bank (your customer's bank) takes the biggest slice – around 70-90% of the total fee through what's called interchange. When your customer pays with a Chase Visa card, Chase Bank collects this portion.
Card Network (Visa, Mastercard, etc.) receives assessment fees. Though smaller than interchange, these fees maintain the massive networks connecting millions of merchants and banks worldwide.
Payment Processor (like Merchant Payment Services) earns the markup for bringing everything together – maintaining your merchant account, providing equipment, and offering support when things go sideways.
The timing is straightforward: when a sale happens, the total amount minus all processing fees lands in your merchant account within 1-2 business days. The fees are automatically deducted – there's never a separate bill to pay.
Dissecting the Numbers: Components & Calculations
Knowing what makes up your credit card processing fees is where real savings begin. In most cases, 70-90 % of every dollar you pay goes to interchange, a sliver goes to the card networks, and the remainder is your processor’s markup. Here’s the fast version of how it all breaks down.
Interchange Basics
Interchange is the largest slice and is set by each card network. Rates vary by card type, risk and industry:
- Visa: 1.15 % + $0.05 to 2.40 % + $0.10
- Mastercard: 1.15 % + $0.05 to 2.50 % + $0.10
- Find: 1.40 % + $0.05 to 2.40 % + $0.10
- American Express (OptBlue): 1.43 % + $0.10 to 3.30 % + $0.10
Lower-risk, card-present sales fall on the low end; premium rewards or online transactions land on the high end.
Assessment & Network Fees
These are the card networks’ own fees and can’t be negotiated:
- Visa: 0.14 % (credit) / 0.13 % (debit)
- Mastercard: 0.1375 % – 0.1475 %
- Find: 0.14 %
- American Express: 0.15 % – 0.165 %
Networks normally update these rates every April and October.
Processor-Level Charges
This is the only part you control. Typical items include:
- Markup (percentage, per-transaction or both)
- Monthly statement or platform fee ($5-$15)
- PCI compliance ($5-$20 monthly or $99-$199 annually)
- Chargeback fees ($15-$100 each)
- Optional gateway fee for e-commerce ($5-$25 monthly)
At Merchant Payment Services there are no early-termination fees, keeping your risk low.
Find Your True Cost
Effective Rate = (Total fees ÷ Total card volume) × 100
If you processed $10,000 last month and paid $250 in fees, your effective rate is 2.5 %. Anything above 3 % should trigger a review.
2025 Pricing Models & Typical Credit Card Processing Fees
Picking the right pricing structure can save thousands each year. Four models dominate 2025:
1. Flat-Rate (Blended)
- Simple, one rate for everything (around 2.6 %-2.9 % + $0.10-$0.30).
- Great for startups or volumes under $5k/month.
- Once volume climbs, you’ll usually overpay.
2. Tiered Bundles
- Transactions are sorted into three buckets (qualified / mid / non-qualified).
- Qualified rate looks cheap, but most sales end up in the expensive tiers.
- Hard to audit, so we rarely recommend it.
3. Interchange-Plus Transparency
- You pay true interchange + a small, fixed markup (e.g., +0.25 % + $0.10).
- Clear statements and lower long-term cost.
- Best fit for businesses doing $10k+ per month.
4. Membership & Subscription
- Flat monthly fee ($49-$199) then direct interchange with no percentage markup.
- Excellent for high-volume or high-ticket merchants (furniture, B2B, etc.).
- Monthly fee still applies during slow periods.
Most established Ohio businesses we serve land on interchange-plus or membership pricing after they crunch the numbers.
Factors That Drive or Reduce Your Effective Rate
Want to drop your effective rate below 3 %? Focus on these levers.
Card-Present vs. Card-Not-Present
- In-store EMV or tap: roughly 1.5 %-2.0 %.
- Online or keyed-in: roughly 2.5 %-3.5 %.
- Encourage pickup-and-pay-in-store or mobile tap-to-pay to capture lower rates.
Merchant Category Code (MCC)
- Each business type carries its own risk profile.
- Verify you’re coded correctly—misclassification can add hundreds per month.
Card Type
- Debit (Durbin-regulated) ≈ 0.05 % + $0.22.
- Basic credit card ≈ 1.5 %.
- Premium rewards or corporate cards can exceed 2.5 %.
- A simple "debit or credit?" prompt nudges customers toward lower-cost debit.
Passing Fees to Customers (Legally)
- Surcharging: add up to 4 % on credit (not debit) in most states; notice required.
- Cash discounting: show regular (card) price and a lower cash price—legal nationwide.
- Minimum purchase: up to $10 on credit per Dodd-Frank.
Quick Cost-Cutting Moves
- Negotiate processor markup once you know your effective rate.
- Batch out daily to avoid higher downgrade fees.
- Use AVS and CVV on e-commerce orders to earn lower interchange.
- Combine small orders to reduce per-transaction fees.
In-Person vs. Online & Network-by-Network Cost Differences
Card-Present vs. Card-Not-Present Costs
Card-present transactions (chip, swipe, tap) generally cost 1.5 %-2.5 %. The same sale online usually lands between 2.5 %-3.5 % because fraud risk is higher and a gateway fee ($5-$25/month) may apply.
Contactless tap-to-pay counts as card-present, so upgrading to an NFC reader is an easy win for brick-and-mortar stores.
Average Fees by Network
- Visa: 1.15 % + $0.05 - 2.40 % + $0.10; assessment 0.14 % (credit) / 0.13 % (debit).
- Mastercard: 1.15 % + $0.05 - 2.50 % + $0.10; assessment 0.1375 %-0.1475 %.
- Find: 1.40 % + $0.05 - 2.40 % + $0.10; assessment 0.14 %.
- American Express (OptBlue): 1.43 % + $0.10 - 3.30 % + $0.10; assessment 0.15 %-0.165 %.
For the most up-to-date numbers, see the official Visa USA Interchange fee PDF.
Equipment & Software Considerations
- Countertop terminal: $200-$600 to buy; simple and reliable.
- POS system: $500-$2,000+ hardware plus $30-$100+ monthly software; best for inventory and reporting.
- Mobile reader: $25-$100; perfect for festivals or service calls.
- Online gateway: $0-$200 setup, $5-$25 monthly, plus $0.05-$0.10 per transaction.
Merchant Payment Services provides free EMV terminals—no leases, no contracts, no hidden upgrade fees.
Frequently Asked Questions About Credit Card Processing Fees
Can I pass credit card processing fees to customers in my state?
"Can I make my customers pay these fees instead?" It's probably the question we hear most often from Ohio business owners – and I completely understand why!
The good news is that yes, in most states, you can legally pass credit card processing fees to your customers through surcharging. As of 2025, this practice is legal in 46 states, with just four holdouts:
- Connecticut
- Massachusetts
- Maine
- Oklahoma
For businesses in Ohio and Kentucky (where we serve most of our clients), surcharging is perfectly legal – but you do need to follow some specific rules to stay compliant:
First, you'll need to notify the card networks at least 30 days before you start surcharging. You'll also need clear signage at your entrance and checkout area so customers aren't surprised. The surcharge must appear as a separate line item on receipts, and you can't charge more than your actual cost (with a cap of 4% in most states, though Colorado limits it to 2%).
One important distinction: surcharges can only apply to credit cards, not debit cards. Many merchants find that cash discounting creates less customer pushback while accomplishing the same goal – and it's legal in all 50 states.
"When I implemented a cash discount program at my hardware store," one Dayton client told us, "I expected complaints. Instead, many customers actually appreciate the transparency about card costs."
How often do networks update fee schedules?
If you've noticed your credit card processing fees sometimes change without warning, there's a reason. Card networks typically update their interchange and assessment fee schedules twice each year:
April: Spring update
October: Fall update
These bi-annual updates can include new card categories, rate increases or decreases, changed qualification requirements, or entirely new fee types. While most changes are incremental, they can add up over time.
In recent years, we've observed modest but consistent increases, though the networks did pause some hikes during the height of the COVID-19 pandemic. Looking ahead to 2025-2026, the networks have agreed to cap certain fee increases as part of a legal settlement.
For our clients across Cincinnati, Dayton, and Columbus, we recommend reviewing your statements carefully after April and October each year. At Merchant Payment Services, we proactively notify our merchants about significant changes that might impact their bottom line – just one way we look out for your business when others might stay quiet about fee increases.
Are debit card fees different from credit card fees?
They absolutely are – and understanding this difference could save your business significant money!
Debit card credit card processing fees are generally much lower than credit card fees, especially for cards issued by large banks. This is largely thanks to the Durbin Amendment to the Dodd-Frank Act, which caps interchange fees for debit cards issued by banks with over $10 billion in assets at 0.05% + $0.22 per transaction (plus a penny for fraud prevention).
For smaller banks and credit unions, debit interchange isn't capped but still typically runs lower than credit card rates.
Here's what this looks like in real numbers:
A regulated debit card might cost you roughly 0.05% + $0.22 per transaction, while a premium rewards credit card could run around 2.10% + $0.10 per transaction. On a $100 sale, that's a difference between paying about 27 cents versus $2.20!
There's one exception worth noting: For very small transactions (under $10), debit cards can actually be more expensive due to their higher fixed component. But for most transactions, debit is almost always the cheaper option.
We often coach our Miamisburg and Fairborn merchants to train cashiers to simply ask "debit or credit?" when customers present cards that can be processed either way. This small change in habit can lead to substantial savings over time.
"I never realized how much I was overpaying until Merchant Payment Services showed me the difference between debit and credit processing costs," a restaurant owner in Kettering recently told us. "Now we save about $400 a month just by processing more transactions as debit."
Conclusion
Understanding credit card processing fees isn't just about knowledge—it's about protecting your hard-earned profits in today's increasingly cashless economy. Throughout this guide, we've broken down these complex fees into their basic components—interchange, assessment, and processor markup—to help you make sense of what you're really paying.
For business owners across Ohio and Kentucky, here's what matters most:
Your effective rate tells the real story. When you divide your total fees by your total volume, you get the true percentage you're paying—and that number should ideally be under 3%. Anything higher deserves a closer look.
As your business evolves, so should your pricing model. The flat-rate plan that worked perfectly when you were just starting might be costing you hundreds or even thousands of dollars in unnecessary fees now that you've grown.
You have legitimate options to offset these costs. Whether it's implementing a cash discount program in Kettering, adding a surcharge in Cincinnati, or setting minimum purchase requirements in Columbus, there are legal ways to share some of these costs with customers who choose cards over cash.
Fee creep is real—and costly. Card networks update their fees twice yearly, and processors count on you being too busy running your business to notice those small increases that add up over time. A regular review of your statements can reveal surprising savings opportunities.
Your processor should be a partner, not an obstacle. Hidden fees, confusing statements, and long-term contracts are warning signs that your processor may not have your best interests at heart.
At Merchant Payment Services, we've been helping local businesses steer payment processing since 1987. Our family-owned company was built on the simple premise that merchants deserve better—better transparency, better service, and better rates.
That's why we offer month-to-month agreements with no early termination fees. It's why we provide free terminals with no strings attached. And it's why our team of local payment experts is always just a phone call away when you need help.
Whether you're a new restaurant in Miamisburg looking for your first payment solution, a growing retailer in Dayton wanting to reduce costs, or an established service business in Fairborn wondering if you could be getting a better deal, we're here to help.
The reality is simple: every dollar you save on credit card processing fees is another dollar in your pocket. In today's competitive business landscape, those savings can make all the difference between struggling and thriving.
Ready to see what you could be saving? Contact us today for a free, no-obligation analysis of your current processing statements. We'll show you exactly what you're paying now and how we can help you keep more of what you earn.