​How Much Are Credit Card Processing Fees? An Ultimate Guide for Merchants

Mar 03,2026

​In today’s digital world, it has become essential for businesses to accept credit cards as a form of payment. Customers prefer to make payments through credit cards because of convenience. However, for every purchase made through a credit card, a small fee is charged to the business for the transaction. Hence, many business owners are curious about how much credit card processing fees are.

​In this blog, we’ll delve into the concept of how much credit cards charge merchants.

​Why Businesses Have to Pay Credit Card Processing Fees

​For every purchase made through a credit card, many systems are involved in the process of payment and transactions. These systems consist of the issuing bank of the credit card, the card network, the acquiring bank of the merchant, and the payment processor.

​For a credit card transaction, these systems verify the credit card details and make sure there is sufficient credit in the card for the purchase. They also prevent scams and make the payment from the customer’s bank to the merchant’s bank.

​For many business owners, it is always a question of how much credit cards charge merchants. The fees vary for different types of cards and different methods of transactions.

​Average Credit Card Processing Fees

​For many business owners, it is always a question of how much the credit card processing fees are. In most cases, the fees are usually between 1.5% and 3.5%.

​For instance, if a customer pays $100 using a credit card, and the processing fee is 2.5%, the merchant pays $2.50 as a processing fee. The remaining $97.50 is then transferred to the merchant’s account.

​Although this percentage might be small, it accumulates rapidly, especially for businesses that process a huge number of transactions daily.

​Main Components of Credit Card Processing Fees

​To better understand the question of how much credit cards charge merchants, it is important to note that the total fee includes several components.

​Interchange Fees
Interchange fees are the largest part of credit card processing fees. These are the fees paid to the bank that issued the credit card used by the customer.

​These interchange fees normally lie between 1% and 2.5%. The specific fee depends on several aspects, such as the type of credit card, whether the credit card is a reward credit card, and the method of processing.

​Assessment Fees
Assessment fees are charged by credit card organizations such as Mastercard or Visa. These fees are used to improve the infrastructure of the payment systems, ensuring smooth processing of credit card transactions.

​Assessment fees are normally small, ranging between 0.1% and 0.15%. Although assessment
fees are smaller compared to interchange fees, they are applicable to all credit card transactions.

​Payment Processor Fees
These fees can be a percentage of the transaction amount as well as a flat fee for each transaction. Some credit card processors can charge a monthly service fee based on the type of account used by the merchant.

Also Read: Square Credit Card Processing Explained: Fees, Features, and How It Works

​Factors That Affect Credit Card Processing Fees

​Type of Card Used
The type of card used for a transaction can determine how much a merchant pays for credit card processing fees. Premium reward cards and corporate credit cards can have higher fees for credit card processing compared to normal credit cards.

​Merchants can expect to pay a little more for credit card processing fees when a premium reward card or a corporate credit card is used for a transaction.

​Payment Method
​The payment method can determine how much a merchant pays for credit card processing fees. When a physical card is used for a transaction, such as when a person taps their card or swipes it on a payment terminal or inserts their card into a payment terminal, a merchant pays a lower fee for credit card processing services.

​Payments made online or by manually entering a card number can have higher fees for credit card processing services because they can be vulnerable to fraud.

​Business Industry
Businesses in certain industries can pay a little more for credit card processing fees compared to businesses in industries where fewer chargebacks or cases of fraud occur.

​Other Costs That Merchants Have to Pay

​Apart from the regular fees, some payment systems charge extra costs, which need to be taken into consideration by merchants.

​These costs may include monthly account fees, payment gateway fees for online transactions, chargeback fees, and equipment fees for card terminals or POS systems.

​For instance, if a merchant accepts online payments, it may need to have a payment gateway that enables customers to enter their card details online at their website.

​Therefore, these extra costs need to be taken into consideration when determining how much credit cards charge merchants.

​How Businesses Can Reduce Credit Card Processing Fees

​While it is impossible to avoid credit card fees entirely, businesses can manage these fees in a better way.

​To begin with, it is vital for businesses to select a reputable payment processor like NDMR Payments that provides transparent fees.

​Get in touch with our team at NDMR Payments to understand our fee structure.