Most Business owners in Orlando we’ve spoken to have asked “What Are Credit Card Processing Fees?”

Accepting credit cards is pretty much a requirement if you own a business in today’s world. Consumers carry less and less cash, enjoy the conveniences of using a credit card, and LOVE racking up their reward points.

You already know that accepting credit cards is vital to the success of your business. Whats not clear is the different rates, fees, and costs that you are responsible for when having a merchant account and accepting credit cards. In this article I’m going to clear things up.

There are 3 establishments that run and are responsible for the whole credit card industry, officially known as the Electronic Payment Processing Industry. The fees that are charged and withdrawn from your bank account each month are divvied up between these 3 establishments.

It’s worth quickly stating that these establishments have unique, separate, but mandatory roles. Regardless of what you may have heard about a particular solution, these 3 establishments cannot be left out to cut costs. They are actually required to make credit card processing possible.


Lets outline these 3 establishments that make up the Electronic Payment Processing Industry and go over the fees that each one collects.

Card Association Brands (These Fees are non-negotiable)

Visa, MasterCard, Discover, American Express, etc.

These different associations collect a percentage and transaction fee every time their brand card is swiped. It is a relatively small amount and reviewed every year for possible increases or decreases.

Although it’s a small percentage, it adds up quite nicely for these associations. The mass majority of the billions of transactions run every year are by these 4 brands. Each brand charges slightly different however they are all within a few hundreds of a percent.

Currently Visa Brand collects: Transaction Amount MULTIPLIED BY (0.13% + $0.0195).

Card Issuing Banks (These fees are non-negotiable)

These establishments are banks that offer credit cards directly to consumers. Some examples of issuing banks that you have probably heard of are Capital One, Citi, Barclaycard, Chase, Wells Fargo, and Bank Of America.

Just like the association brands, these banks collect a percentage and transaction fee every time their issued credit card is swiped. All of these issued cards have a specific card association brand on them like Visa or MasterCard.

This is where rates and fees start to become confusing because there are thousands of different credit cards that flood the marketplace. Although the rates on these cards are public information and can be obtained, they are not advertised on the card for a merchant or business to see.

These card issuing banks compete with each other trying to get consumers to sign up for their credit card by offering appealing rewards to use them. They create different plans where they reimburse the consumer for every dollar spent with cashback, air miles, hotel points, dining dollars, etc..

For example, a Barclaycard Arrival+ collects: Transaction Amount MULTIPLIED BY (2.30% + $0.10). MasterCards Brand Association Fee which is (0.13% + $0.0195) is not part the 2.30% +$0.10 collected by Barclaycard.

Credit Card

For the record, we do not agree with the amount of fees Card Issuing Banks collect from merchants and are fighting for you to get them reduced by U.S. Government regulation. Learn More And Sign Our Petition To Lower Card Issuing Bank Fees – Click Here

Merchant Service Providers (These fees are negotiable)

Merchant service providers give businesses the ability to accept credit card payment for goods and services. They typically handle the equipment that process the credit cards (unless its 3rd party Point-Of-Sale System – Click to Learn More), deposit the money into the merchants bank, collects the fees, and then disburse the fees accordingly to the Card Association Brands, the Card Issuing Banks, and themselves.

These providers are a merchants direct point of contact and should provide exceptional, hands on, and prompt support for any and all aspects of their merchant account. For their important role they collect their own margin above the other associations non-negotiable fees.

This margin which a merchant can negotiate, typically equates to a percentage of the credit card volume and/or number of transactions run. 

In most cases it’s extremely hard to decipher this percentage and requires a merchant specialist to figure it out.  Click here to learn more about our profit margin above the non-negotiable fees. 

The reason most Merchant Service Providers make it difficult and disguise their markup margin is because they operate in a very competitive free market. The effect of this is thousands of competitors trying to get their piece of the pie.


I hope you have enjoyed reading this post. Most business owners do not fully understand credit card processing fees like you NOW do.

Knowing that the Card Issuing Banks collect the largest sum of fees which are non-negotiable (at least 70%), we encourage you to focus instead on negotiating the fees that are adjustable; the Merchant Services Providers margin.

The reality is, the majority of merchants in the market place are paying their merchant service provider between 20%-30% of their total fees. This means that they have room to reduce this negotiable markup by 10-15%. Although it doesn’t seem like much, this type of savings can make a significant impact.

This is why its so important to work with a provider who transparently states what their markup margin is. Once you know this margin and percentage you will be able to clearly see for yourself if it is fair.

Understand that this aspect of your business is all set once you have the transparency coupled by a support team that is accessible and stays on top of your needs. Be cautious of merchant service providers who offer to provide their services with little to no markup cost.

Although this is actually possible, a provider will only do this  for a month or two and then begin to subtlety increase their rates. The tiny savings for a few months is not worth it because you will end up paying significantly more over the long term.

For that exact reason, these type of strategies usually include a hidden long term contract clause with an outrageous termination fee. Merchant service providers offering “too good to be true” rates or offering to cut your credit card processing fees in half are just trying to make a sale or blindly naive.


In this video I show different merchant processing statements, identify the different fees, and associate them with their establishment:


All business owners can contact 1Quest Payment to learn more.

Donnie Troy
Donnie Troy
1Quest Payment’s mission is to help as many merchants as possible find the best credit card processing solution so they can focus their time and energy on growing their business. Contact Donnie today, call 1.800.413.7573 or use our contact form