What Factors That Affect Credit Card Charges?

What Factors That Affect Credit Card Charges

What Factors That Affect Credit Card Charges?

A payment processing fee is what you pay your credit card processor when you accept a transaction. It’s also known as a “merchant discount rate,” and it’s typically expressed as a percentage of the sale price. For example, if you charge 3% on every dollar your customer pays with their credit card, you’d be charging 30 cents on those dollars. This blog post will help you understand how credit card charges work so you can take full advantage of them!

Card-Present Vs. Card-Not-Present Transactions

Card-present transactions are when the cardholder is physically present during an online or in-store purchase. On the other hand, card-not-present transactions occur when a retailer has no way to verify that you are who you say you are. This can happen if you’re buying something online and don’t have to provide any personal information or someone else pays for something with your credit card number over the phone.

Card-not-present transactions tend to cost more as they require additional security checks and handling fees from banks and processors. The costs associated with these purchases add up quickly; while traditional credit cards usually only charge around 3% per transaction (on average), debit cards generally charge roughly 5%.

Interchange Fees

Interchange fees are another payment processing fee that merchants pay to the credit card issuer. The interchange fee is a percentage of the transaction amount and is typically 2-3%. For example, if you purchase something on your credit card for $100, your merchant will pay an interchange fee of 2% or 3% of your purchase price. The merchant’s cost of accepting credit cards will depend on many factors:

  • How much time it takes for them to process each credit card payment (some merchants process payments more quickly than others).
  • What types of payment methods they accept (debit cards are usually less expensive than credit cards).
  • Whether or not they have agreements with their banking institutions about lowering rates for certain types of purchases.

Payment Processors Markup 

Payment processors charge a markup—it’s just how payment processing works. Markups are the fees that processors add to every transaction they process, and this fee is typically 1-3% of the total sale price. This makes sense; payers have to cover their costs, so they charge a small fee on top of what you charge customers. If you don’t want these fees to eat into your profits, there are ways around them!

PCI Compliance Fee/Network Access Or Assessment Fees

The Payment Card Industry Data Security Standard (PCI DSS) is a set of rules and requirements for anyone who processes, stores, or transmits credit card information.

Under the standard, processors are required to adhere to certain standards when securing stored credit card data; they also have to conduct regular assessments on their security systems to ensure that they comply with all PCI DSS requirements. If they don’t do so, they may face fines from Visa or Mastercard.

To cover these costs, processors typically add an assessment fee to each transaction. This fee covers everything from conducting annual assessments for compliance with PCI DSS standards (known as an “assessment” or “audit”), hiring IT staff members who can help with compliance tasks such as password management programs, and installing encryption software on servers used by merchants.

Early Termination Fees

You may be charged an early termination fee if you cancel your credit card contract before it expires. This penalty for canceling a contract before it expires is usually expressed as a percentage of the remaining balance on the card. The payment processor pays it to cover their costs in canceling contracts.


We hope this article has been helpful and informative. Please keep in mind that many other fees can affect your credit card processing fees, so always check with your provider before signing up with them!