How to lower your credit card processing fees

The short answer

You can’t change interchange, the fee that goes to your customer’s card-issuing bank. Almost everything else on your statement is up to you and your provider. In order:

1. Find your real rate.
2. Read your statement, so you know which pricing model you’re on and what each line is.
3. Cut the lines that cost most: typed-in payments, instant payouts, monthly fees and rented equipment.
4. Get an interchange-plus quote if your sales are steady.
5. Negotiate with a written quote in hand.
6. Switch only if the saving pays back the cost of leaving.

Find your real rate

Your effective rate is your total fees divided by your total card sales. If you paid $640 in fees on $20,000 of card sales, your effective rate is 3.2%.

That one number tells you whether you have a problem. Published in-person flat rates at the providers we compare run from 2.29% + 9¢ at PayPal POS to 2.7% + 5¢ at Stripe. If you take most cards in person and your rate is well above that range, something on your statement is costing you.

The fee calculator does the math. It takes your current fees and shows what the same month would cost at each provider’s published price.

How to read your merchant statement

Every provider lays out its statement differently. But the charges fall into the same few groups.

First, the three totals. Card sales for the month (sometimes “gross sales,” “volume” or “amount processed”), the number of card payments (“transactions” or “count”), and total fees. If your provider takes fees out of each deposit, you may need to add them up from your deposit reports.

Then the lines, from the card cost to your provider’s cut:

• Interchange. The fee that goes to the bank that issued your customer’s card. It changes with the type of card and how it’s taken. You can’t negotiate it. Our interchange guide shows real published rates.
• Network fees, sometimes called assessments. Fees the card networks themselves charge. Names and amounts vary by provider and network, so ask yours to name each one.
• The processor’s markup. What your provider keeps. On a flat rate it’s hidden inside one number. On interchange-plus it’s a separate line, such as Helcim’s published 0.40% + 8¢ per in-person sale.
• Fixed monthly fees. Plan or software fees, statement fees, PCI fees and batch fees. These come out whether you sell or not.
• Equipment. A terminal rental, lease or hardware subscription, if you have one.
• One-off fees. Chargebacks, instant payouts and similar.

For what each provider publishes on every one of these lines, see credit card processing fees, explained.

Which pricing model are you on?

• Flat rate: one percentage, often plus a few cents, on every card. Square’s Free plan is 2.6% + 15¢ in person whatever card your customer uses. Simple to predict, and the provider absorbs the expensive cards.
• Interchange-plus: interchange as its own line or lines, plus a markup. Your total moves with your customers’ cards. Compare the markup, never the total, between providers.
• Tiered: card sales sorted into a few buckets, often labeled qualified, mid-qualified and non-qualified, each at its own rate. The provider decides which sales land in which bucket. None of the providers we compare publish bucket rates like this, so we can’t show you real numbers. If your statement looks like this, ask for the rules in writing, and get an interchange-plus quote to compare.

The lines that cost most, and what to do

Typed-in payments. Cards you key in cost more than cards tapped or dipped. SpotOn lists 3.45% + 15¢ keyed in, against 2.45% + 15¢ in person. On a $100 sale, that’s $3.60 against $2.60. At 200 phone orders of $100 a month, it’s $200 a month (our arithmetic). Clover lists 3.5% + 10¢ typed in, against 2.3% + 10¢ in person on most bundles. Where you can, send a payment link or take the card at pickup, and check what each option costs.

Instant payouts. Square charges 1.95% per instant transfer, Clover’s Rapid Deposit costs 1.75%, and Stripe and PayPal charge 1.5% with a 50¢ minimum. Moving $20,000 a month through Rapid Deposit costs $350 a month (our arithmetic). Square’s standard next-business-day transfers are free.

Monthly fees billed monthly. Paying yearly is often cheaper. Lightspeed Retail Basic is $109 a month billed monthly or $89 billed yearly, which saves $240 a year. Shopify Basic is $39 or $29, which saves $120 a year. And check for plans you no longer use.

Equipment leases and hardware subscriptions. Renting hardware over a long term usually costs more than buying it. Clover lists its Mini at $45 a month for 36 months, or $849 to buy. Over the full term, renting costs $1,620, which is $771 more (our arithmetic). Clover also says its subscriptions are “non-cancelable and ineligible for refunds.” Before you sign any lease, add up every payment.

PCI fees. Some providers charge a PCI fee, and the amount is set by your provider. Helcim lists its fee for the annual compliance self assessment as $0. Most providers we compare don’t publish one. If your statement shows a PCI fee or a “non-compliance” charge, ask what it covers and what you need to do to stop paying it. Our PCI compliance guide explains what’s actually required.

Passing the cost to customers

Some businesses add a surcharge to card payments, or post a lower cash price. Whether you can, and how, depends on your state and the card networks’ rules. We cover them on their own pages: the credit card surcharge guide and the cash discount program page.

Get an interchange-plus quote

If your sales are steady, interchange-plus can cost less than a flat rate, because you pay the real card cost plus a published markup. Two providers we compare publish theirs:

• Helcim: interchange + 0.40% + 8¢ in person, up to $50,000 a month, with lower markups at higher volume. Helcim says its discounts “automatically apply based on the average of your last three months of processing volume.” No monthly fee.
• Stax: “0% markup on interchange,” plus 8¢ per in-person sale and a subscription of $99, $139, or $199 and up a month, depending on your yearly volume.

Send a recent statement and ask for a written quote. Compare the total, not the markup. Our guide to interchange-plus vs flat rate shows where each one wins.

How to negotiate your rate

Providers don’t usually advertise room to negotiate. A few say so in their own words:

• Stripe says a custom package is “available for businesses with large payments volume or unique business models,” listing “IC+ pricing” and “Volume discounts.”
• SpotOn offers a Build Your Own plan with “Custom rates,” which it describes as “For multi-unit, enterprise, and other high-volume operations.”
• Toast lists a Build Your Own plan at “Custom pricing.”
• Clover says the prices on its site “are only available on Clover.com.” If you bought Clover through a bank or reseller, compare your rate with Clover.com’s.

What works best is a written quote from a competitor, based on your real statement. Ask your provider to match it, and get any new rate, fee and term in writing before you agree.

When switching is worth it, and what leaving costs

Switching makes sense when the monthly saving pays back the cost of leaving. Here’s what each provider’s own terms say about leaving:

Provider	Term and notice	Leaving early	Hardware
Clover	Either side can end it with 30 days’ notice	Termination fees “can vary based on your service provider”	Can’t be used with other processors
Toast	Retail: 12-month minimum. Restaurants: not published.	No fee published	You must use Toast’s processing
SpotOn	Essentials: month to month. All-In: 2-year minimum.	You owe the monthly fees left in the term, return or buy rented hardware, and may owe the hardware discount	Can’t use your own POS hardware
Lightspeed	Renews unless you give 90 days’ notice, on terms over 90 days	Fee includes the recurring fees left in the term	Existing terminals can’t be used with Lightspeed Payments
Heartland	36 months, then renews for 12 unless you give 60 days’ written notice	$295 per location	Not stated
Helcim	No contract	“No contracts, leases, termination fees or cancellation fees.” You close by calling support.	Its POS app works only with Helcim hardware and an iPhone
Stripe	No contract	Close anytime in the Dashboard. Stripe says it charges no closure fees.	Not stated
Shopify	Monthly or yearly billing	Close Shopify Payments anytime. Fees already paid aren’t refunded.	Shopify-supported card readers need Shopify Payments
Stax	Not published	“No cancellation fees”	Not stated
PayPal POS	Not stated	No cancellation fee stated	Not stated

Heartland’s terms come from a 2010 document on its site, so ask whether they still apply.

Work out the payback. Add up what leaving costs, then divide by what you’d save each month. Say you’re on Heartland’s terms with one location, and switching would save $60 a month. The $295 early termination fee, plus $349 for a Helcim Smart Terminal, is $644. That pays back in about 11 months ($644 ÷ $60). These are our estimates, with an assumed saving.

Don’t swap one lock-in for another. Before you sign with a new provider, get its term, cancellation fee and hardware rules in writing. Restaurants on Toast can compare their options on our Toast alternatives page.

Keep reading

• Credit card processing fees, explained: every line on a US statement.
• Interchange-plus vs flat rate: which pricing model fits your business.
• Compare payment processors: every provider’s rates side by side.
• Full breakdowns: Helcim, Stax, Clover, Toast.