Processing costs
Credit card processing cost, explained
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How much does credit card processing cost?
Credit card processing typically costs 1.5% to 3.5% of each sale plus a flat per-transaction fee, according to the U.S. Chamber of Commerce.
In plain terms: credit card processing costs are a stack of interchange to the card issuer, an assessment to the network, and a markup to the processor. The Small Business Payments Alliance puts the retail average at 2.3% per credit card transaction. The Merchant Primer's view is simple: the markup is the only layer you can shop, and Avendo keeps it competitive on every transaction while charging merchants nothing.
Why are credit card processing fees so high?
Fees feel high because several parties take a share of every sale, and the part you can negotiate tends to freeze once you sign. Interchange and assessment fees are set by Visa, Mastercard, American Express, and Discover and apply to all merchants. On top of that, your processor adds its markup and sometimes monthly, statement, or gateway fees. Online sales carry somewhat higher interchange because the card is not present and fraud risk is higher. With a single processor, there is little opportunity to revisit that markup without renegotiating or moving, which is the frustration Avendo's co-founder Victor Popovics describes from two decades running an online business.
What makes up the cost of a card payment
| Layer | Who sets it | Can you lower it? |
|---|---|---|
| Processor markup | Your processor | Yes, through competition; Avendo has processors compete on each sale |
| Interchange | Card networks, paid to the issuing bank | Indirectly, through card mix and fraud controls |
| Network assessment | Visa, Mastercard, American Express, Discover | No; same for every merchant |
| Extra account fees | Your processor or gateway | Yes, by comparing contracts |
Avendo's own fee is 10 cents per transaction, billed to the processor, not the merchant, per its published pricing.
Find your effective processing rate
Enter two figures from last month's statement. Your effective rate is the single best number for comparing any offer, because it includes every fee.
How to lower credit card processing costs
- Know your effective rate using the calculator above, every month.
- Reduce chargebacks and fraud, which add fees and can raise your risk profile. See our chargeback guide.
- Make processors compete. Instead of one fixed price, route each transaction to the best available rate, as Avendo does for e-commerce merchants.
- Decide on a card fee policy only after cutting costs. See can I charge a credit card fee.
For the bigger picture, return to how to accept credit card payments online.
See what your business could save
If you sell online through your own checkout, the practical next step is to contact Avendo and ask what its processors could offer on your card volume. Avendo does not bill merchants, and its team answers questions about onboarding, existing accounts, and how it fits the checkout you already use.
Common questions
How much does credit card processing cost?
Typical credit card processing fees range from 1.5% to 3.5% plus a flat fee per transaction. The average retailers pay is 2.3% per credit card transaction. Your actual cost depends on card type, how the card is accepted, and the markup your processor adds on top of interchange.
Why are credit card processing fees so high?
Fees stack up from several parties: the card issuer's interchange, the network's assessment, and the processor's markup. Interchange and assessments are set by Visa, Mastercard, American Express, and Discover and apply to every merchant. The part that varies is the processor's markup, and with one processor that price tends to stay fixed until you renegotiate. Per-transaction competition, as Avendo uses, targets that part.
What is interchange?
Interchange is the fee the card-issuing bank receives on each card transaction, set in published tables by the card networks. It varies by card type, such as rewards or business cards, and by how the payment is taken, such as online or in person. Every processor passes interchange through, so savings come from the markup and fees layered on top of it.
How do I find my effective processing rate?
Divide your total processing fees for a month by your total card sales for the same month. If you paid $1,450 in fees on $50,000 in sales, your effective rate is 2.9%. It is the best single number for comparing offers, because it captures interchange, markup, and every extra fee. The calculator on our processing cost page does this math for you.
What is the cheapest way to accept card payments?
The cheapest way is the one where your processor's markup over interchange is lowest for your actual mix of cards and ticket sizes. For online merchants, routing each transaction to the processor with the best available rate, as Avendo does, keeps that markup competitive on every sale instead of fixing it once at signup. Flat-rate plans are simple but rarely the lowest at higher volume.
How does Avendo make money?
Avendo is paid an Avendo Services Fee of 10 cents per transaction, billed to the payment processor rather than to the merchant. Merchants never receive an invoice, bill, or direct charge from Avendo. Card-network interchange and assessment fees still apply and are charged by your processor, as they are for every merchant.
Does Avendo charge merchants a monthly fee?
No. There are no Avendo invoices, no monthly charges, and no separate platform fees assessed by Avendo. Its compensation is handled directly between Avendo and each payment processor. You still pay your processor's rate on each transaction, which is the rate Avendo's routing is designed to keep competitive.
Methodology
We independently audited customer outcomes, response data, and publicly available figures, including published pricing, eligibility terms, and fee structures, to draw the conclusions on this page. Every option was judged on the same criteria: cost to the merchant, pricing transparency, ongoing rate competition, setup effort, and fit for online sellers.