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Everything you need to know about Credit Card Processing Fees

An easy to understand breakdown of credit card processing fees.

Collections Chargebacks

Credit card processing fees may be difficult to understand. A merchant account may often include far more fees than originally anticipated - most of them laid out in fine print. For this reason, we set out with the goal of making debit and credit card processing fees easy to get so you can be as prepared as possible!

Meet The Participants


Credit Card Associations

Credit card associations are at the center of the whole credit card network. These companies set the rules and everyone else must follow.

Credit Card Processing
Credit Card Processing Banks

Credit Card Issuing Banks

These institutions issue credit cards to people and businesses. You can easily identify them by their logo on any given credit or debit card.


Credit Card Processors and Merchant Account Providers

These businesses are the people you go to when you need a merchant account - people like us!

Credit Card Merchant Accounts
Credit Card Processing Gateway

Payment Gateways

These businesses allow merchants to accept online payments through their payment gateways.

How are they involved in a transaction?

Below is the flow that any typical transaction goes through.



Payment Gateway

Credit Card Processor

Credit Card Association

Card Issuing Bank

Types of Fees

The total cost of your merchant account is combined of three different fees: Transactional Fees, Flat Fees, and Incidental Fees.

Total Cost of Merchant Account
Incidental Fees
Flat Fees
Transactional Fees

Who Charges What?

Let's look at which participants charge what type of fees.

Payment Gateway

Flat Fees

Credit Card Processor

Incidental Fees
Flat Fees
Transactional Fees

Credit Card Association

Transactional Fees

Card Issuing Bank

Transactional Fees

Breakdown of Fees

Now that we know about what type of fees make up your merchant account fees, let's talk about each individual fee that you may encounter.

Transactional Fees

Transactional fees are fees that occur every time you run a transaction. These fees are usually the biggest cost of a merchant account.

Interchange Reimbursement Fees

These fees consist of a percentage of each transaction and may be accompanied by a flat transaction fee (2.95% & 0.25). This fee may also depend on the type of transaction.


These may be based upon a percentage of the total transactional volume of the month. Some examples of the ones that may appear on your statement include NABU & APF Fees.

Flat Fees

Flat fees may vary by amount and applicability but at least some of these will show up on your monthly statements.

Monthly Fees

Every processor will charge a monthly fee though it may be called anything from a admin fee to a maintenance fee.

Monthly Minimum Fee

A monthly minimum is the lowest of amount of fees that a processor will charge in a month. If a merchant does not meet the monthly minimum amount they will incur an additional charge that is equal to the difference between the actual fees on their merchant account and the monthly minimum amount.

PCI Compliance Fee

This is a annual fee that covers the cost of maintaining PCI compliance and helping their merchants to do the same.

Payment Gateway Fee

Gateways charge a monthly fee in order to allow merchants to gain access to the online processing gateway.

Payment Gateway Setup Fees

A merchant may also be charged a one-time fee for setting up the payment gateway or virtual terminal.

Cancellation Fee

A cancellation fee is charged when a merchant terminates their account with a processor or merchant service provider. The cancellation fee may or may not be governed by time constraints.

Statement Fee

A statement fee may be charged for paper merchant bank card statements of the transactions done in a given month.

Online Reporting Fee

Some processors may charge a fee for online reporting services though this is often included within your basic monthly fee.

Application Fee

Some merchant account providers may charge an application or activation fee because high risk accounts take a lot of time and effort to set up. Luckily - here at Zeno Payments, we don't!

Incidental Fees

Incidental fees are only charged once per incident. For example, if you have a charge back then a charge back fee may appear on your bank statement.

Address Verification Service Fee

This is a fee charged for every transaction where the billing information is provided with credit card information. This more often occurs with ecommerce accounts.

Voice Authorization Fee

This fee is only charged when a merchant contacts the processor to verbally authorize a transaction.

Retrieval Request Fee

A retrieval fee is charged when a processor notifies a merchant of a chargeback on their account and requests supporting documents to validate the charge.

Chargeback Fee

A chargeback fee is only charged when there is a charge back against a merchant regardless of whether or not the merchant wins the dispute.

Batch Fee

A batch fee is charged every time a merchant sends a batch of transactions to the processor. This only usually occurs once or twice a day.


An NSF fee is a fee that a processor may charge a merchant if there is not enough funds in a merchant's bank account to cover the merchant account expenses.

And there you have it! That's everything you should know about credit card processing and merchant account fees! If you have more questions about fees, don't hesitate to let us know!

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