Understanding Interchange Fees and Credit Card Processing Rates

Every card payment costs your business something. Most of that cost is not set by your processor at all. Understanding the pieces makes it much easier to compare quotes and spot a bad deal.

The three layers of card processing costs

1. Interchange

Interchange is the fee paid to the cardholder's bank (the issuer) on each transaction. It is the largest part of what you pay. Card networks publish interchange tables with hundreds of categories, and the rate depends on things like:

• Credit vs. debit, and basic vs. rewards or business cards
• Card-present vs. card-not-present (online and phone orders usually cost more)
• Your merchant category, such as retail, restaurants or travel
• How much data is sent with the transaction and how quickly it is settled

For a sense of scale, average Visa and Mastercard credit card interchange was about 2.36% in 2025, according to the Merchants Payments Coalition.

2. Network (assessment) fees

Visa, Mastercard, Discover and American Express charge their own smaller fees for using their networks. These are usually a fraction of a percent plus small per-transaction charges.

3. Processor markup

This is what your processor charges for its service, and the only part that is truly negotiable.

The main pricing models

Interchange-plus

You pay the actual interchange and network fees, plus a fixed markup, for example a percentage plus a few cents per transaction. It is the most transparent model because you can see exactly what goes to the card brands and what goes to your processor.

Flat rate

One rate for every card, such as a single percentage plus a per-transaction fee. It is simple and predictable, but you often pay more than necessary on lower-cost debit cards.

Tiered

Transactions are sorted into "qualified", "mid-qualified" and "non-qualified" buckets with different rates. The processor decides which bucket each transaction falls into, which makes this model the hardest to compare. Non-qualified rates can be well above 3%.

What changed for debit cards in 2026

Since 2011, the Federal Reserve's Regulation II has capped debit interchange for large issuing banks (those with $10 billion or more in assets) at 21 cents plus 0.05% of the transaction, plus a 1-cent fraud-prevention adjustment for eligible banks. In October 2026, a federal appeals court upheld a lower court ruling that struck down the Fed's rule, and the Fed is expected to rewrite it. The practical effect for merchants, and when it applies, is still unfolding, so check with your processor for current debit costs.

Other fees to look for

• Monthly account or statement fees
• Gateway fees for online payments
• PCI compliance or non-compliance fees
• Chargeback fees
• Early termination fees
• Equipment leases

How to lower your processing costs

• Ask for interchange-plus pricing so you can see the real costs.
• Send complete transaction data, including address and invoice details for business cards.
• Settle batches daily; late settlement can push transactions into higher-cost categories.
• Use chip and contactless for in-person payments.
• Reduce chargebacks, which carry fees on top of the lost sale.
• Review your statement every few months for new or rising fees.

Get clear pricing from Zeyla

At Zeyla, a payments specialist reviews your business and explains your pricing before you agree to anything. Applying is free and takes about 3 minutes. Start your application.