What makes up a card processing fee
Every card payment pays three parties: the card-issuing bank (interchange), the card network (assessment or network fees) and the payment processor (its markup). Visa states that merchants do not pay interchange directly; they pay a "merchant discount" to their acquirer, which includes it.[1]
| Part | Who gets it | Who sets it |
|---|---|---|
| Interchange | The bank that issued the card | Visa, Mastercard and the other networks, by card type and how it is taken |
| Network (assessment) fees | The card network | The network; not published on their public merchant pages |
| Processor markup | Your processor or acquirer | Your contract |
Flat-rate processors bundle all three into one price. Interchange-plus contracts pass interchange and network fees through at cost and add a stated markup, which is why the interchange-plus pricing guide matters when you compare quotes.
Flat-rate processor fees compared
Flat rates from the large U.S. processors run from 2.6% + 15¢ in person to 3.3% + 30¢ online, and PayPal's card rate carries a 49¢ fixed fee.[4][5][6][7]
| Processor and channel | Rate | Fee | Effective |
|---|---|---|---|
| Stripe (online) | 2.9% + $0.30 | $1.75 | 3.50% |
| Stripe (in person) | 2.7% + $0.05 | $1.40 | 2.80% |
| Square Free (in person) | 2.6% + $0.15 | $1.45 | 2.90% |
| Square Free (online) | 3.3% + $0.30 | $1.95 | 3.90% |
| PayPal standard card payments | 2.99% + $0.49 | $1.99 | 3.97% |
| Shopify Payments, Basic (online) | 2.9% + $0.30 | $1.75 | 3.50% |
Each of these has its own calculator on this site: Stripe, Square, PayPal and Shopify.
Card interchange examples
Mastercard's U.S. consumer credit interchange for a standard card-not-present payment runs from 1.95% + $0.10 on a Core card to 2.60% + $0.10 on a World Elite card under its April 2026 schedule.[2]
| Mastercard program | Core | World Elite |
|---|---|---|
| Merit I (card not present) | 1.95% + $0.10 | 2.60% + $0.10 |
| Merit III base (card present retail) | 1.65% + $0.10 | 2.30% + $0.10 |
| Standard (non-qualified) | 3.15% + $0.10 | 3.15% + $0.10 |
Debit is far cheaper when the card comes from a large bank: Regulation II caps that interchange at 21¢ + 0.05% plus a 1¢ fraud-prevention adjustment.[3] On a $50 debit purchase that is $0.245, under 0.5%. Rewards credit cards cost the most, which is why your average interchange depends on who your customers are.
When interchange-plus beats a flat rate
Interchange-plus tends to win for businesses with high volume, larger tickets and many debit cards, because the flat rate charges the same margin on every card while interchange-plus passes the cheap ones through at cost. A flat rate is simpler and predictable for small or new businesses, and it often comes with no monthly fees. Run both with your own numbers above; small differences in the markup and monthly fees decide it at low volume.
Fees on card sales are a cost of each sale. Put your effective rate into the profit calculator or the selling price calculator to see what it does to your margin.
Frequently asked questions
How much are credit card processing fees?
On a $50 payment, 2.8% to 4.0% with the large U.S. flat-rate processors (2.6% + 15¢ to 3.3% + 30¢ and up). Interchange-plus costs the interchange (1.65% to 2.60% plus $0.10 for most Mastercard consumer credit cards) plus network fees and the processor's markup.
What is interchange?
The fee the card-issuing bank receives on each payment. The card networks set the rates by card type, merchant type and how the card is taken.
How do I calculate my effective processing rate?
Divide the total fees on your monthly statement by your total card sales for the month.
Are debit cards cheaper to accept?
Usually. For cards from banks with $10 billion or more in assets, Regulation II caps debit interchange at 21¢ + 0.05% plus a 1¢ fraud adjustment.
Should a small business choose flat-rate or interchange-plus?
Compare both with your own volume, ticket size and card mix. Flat-rate pricing is simpler; interchange-plus often costs less at higher volumes if the markup and monthly fees are low.
Sources
- Visa USA Interchange Reimbursement Fees
- Mastercard 2026–2027 U.S. Region Interchange Programs and Rates (archived copy)
- 12 CFR Part 235 (Regulation II), sections 235.3 and 235.4
- Pricing and fees (U.S.)
- Processing fees, plans and software pricing (U.S.)
- Merchant and business fees (U.S.)
- Shopify pricing (U.S.), archived copy of shopify.com/pricing