A card-processing price that looks simple can conceal several different costs. Understanding those layers is the first step toward comparing providers properly.
The four costs to look for
Interchange is generally paid through the acquiring chain to the card issuer. Scheme fees support the card network. Acquiring or processing margin is charged by the provider serving the merchant. A business may also pay gateway, terminal, account or transaction fees.
Some providers bundle these components into one flat percentage. Others use an “interchange plus” model that passes through underlying costs and adds a disclosed margin. Neither structure is automatically cheaper. The right comparison depends on transaction volume, average transaction size, card mix, sales channel and contractual extras.
Calculate the effective rate
Start with the total payment-related cost on a monthly statement. Divide it by the value of card sales processed in the same period, then multiply by 100. This effective rate is more useful than comparing headline percentages alone.
For example, $850 in total costs on $50,000 of card sales produces an effective rate of 1.7 per cent. Repeat the calculation across several months because card mix and seasonal volume can change the result.
Questions worth asking
- Are domestic debit, credit, commercial and international cards priced differently?
- Does the rate include gateway and fraud-tool charges?
- Are refunds, chargebacks or failed transactions charged?
- Is least-cost routing available and enabled?
- Are there minimum monthly fees, terminal rental or exit costs?
Keep the provider’s quote, fee schedule and merchant agreement together. A low headline rate is only meaningful when you understand what it includes.