Credit Card Processing Fees Can Quietly Raise Business Costs
A former processor executive explains where markups and contract terms can add thousands to annual card expenses.
U.S. merchants paid $198.25 billion to accept cards in 2025, up from $62.1 billion in 2009. Card acceptance is now commonly a business’s second-largest operating expense, behind labor. The networks’ published rates changed only modestly, so growing merchant bills often reflect processor markups and added charges instead.
The article says interchange usually makes up 80% to 90% of a typical processing bill. Processor markups may be far above competitive levels. On $2 million in yearly card sales, a 0.50% markup instead of 0.05% adds $9,000, before extra fees. Business owners are urged to ask for interchange-plus pricing, confirm whether interchange is passed through without padding, and have all processor-controlled charges identified.
Contracts also deserve close attention. Agreements may allow fee changes, early termination charges, liquidated damages, equipment leases that continue after processing ends, and automatic renewal. Promotional rates or matching promises carry little weight if they are absent from the signed contract. The former executive’s auditing firm reports overbilling on about 99% of reviewed statements and says more than 90% of audited accounts were incorrectly configured at the outset.
- Visa and Mastercard adjust rates twice each year, in April and October.
- Some processors require cancellation notices as much as 90 days before renewal.
- A monthly $8.95 merchant-ID charge was introduced during the Great Recession.
- Written terms signed by a company officer provide stronger documentation than verbal promises.
Summarized from the reporting above. Read it for the full story.
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