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Updated Jan 19, 2024

5 Tricks to Lower Your Credit Card Processing Fees

Are you paying too much for credit card processing? Here are five things you can do to lower your rates.

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Julianna Lopez, Business Operations Insider and Senior Writer
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Editor Reviewed
This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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Busy small business owners have numerous concerns and juggle myriad tasks, and chief among them is cutting business expenses. Credit card processing fees often don’t merit much attention because they seem inevitable and part of the cost of doing business. However, transaction fees, assessment fees, authorization costs, and monthly fees add up quickly, leaving companies with astronomical monthly credit card processing bills. 

We’ll look at five ways to lower your credit card processing fees and share more information about the costs of accepting credit cards for your business.

5 ways to lower your credit card processing fees

Not accepting credit cards is unwise for many businesses because customers prefer the convenience of card payments. Credit card processing expenses are part of the cost of doing business. However, you can take steps to save up to thousands of dollars monthly on credit card processing fees. Here’s how.

1. Negotiate with credit card processors to lower fees.

Talk to your credit card processor and ensure you’re getting the best deal possible. As your business grows, ensure you’re still getting a good value based on your volume.

The best way to negotiate lower credit card processing fees is to be seen as a merchant that adds value, thus making the vendor want your business, advised Rey Pasinli, executive director at Total-Apps, a merchant account service provider.

According to Pasinli, you can negotiate with credit card processors by leveraging your transaction volume. This is because the more you sell, the more transactions you perform, and the more value it adds to the processor.

“Processors, just like any other business, can negotiate with their suppliers off of the volume of processing their clients complete,” Pasinli said. “The more you give them, the more negotiating power they have upstream to lower their overhead in different areas. In turn, they can lower your rates if it is worthwhile to them.”

Look for credit card processors with reasonable rates, fees, and equipment costs. Check out our reviews of the best credit card processors to find one that fits your needs and budget.

2. Reduce the risk of credit card fraud to lower fees.

The higher your security risk as a merchant, the higher your credit card processing fees will be. According to Jeffrey Gehrs, former president of credit card processing company Electronic Merchant Systems, businesses have two primary ways of reducing credit card security risks

  • Swiping credit cards as opposed to keying in credit card numbers 
  • Entering security information

“Swipe as many cards as you can,” Gehrs advised. That’s because the rates set by card brands like Visa and Mastercard are higher when the cards are keyed in because of the risk of fraud. “With new technology, like cell phone swipers offered by full merchant-service providers and microprocessors like Square, there are few excuses to not swipe the majority of your cards,” Gehrs noted.”

Merchants can also lower the risk of fraud by providing security information that protects the cardholder and validates the purchase. Gehrs recommends always entering the billing ZIP code and security code when prompted. “This seems like a small nuisance but bypassing this step could cost your business over 1 percent of each sale,” he said. “Similar to keying in sales, forgoing this process means a higher rate due to fraud risk.”

Did You Know?Did you know
When accepting credit cards online, always verify billing addresses and ensure your e-commerce website has security measures like an SSL certificate and encrypted connections.

3. Use an address verification service to lower fees.

To take a step further in reducing credit card fraud on big-ticket items, use an address verification service (AVS), a system that verifies the cardholder’s billing address with the card issuer. This fraud-fighting tool has enormous benefits in the e-commerce world, including limiting chargebacks.

During the checkout process, the customer enters their address, which is then compared to the address on file with the issuing bank. Once the comparison is made, the issuing bank sends an AVS code to the merchant, who can then use the code to authorize or reject the transaction.

Both Visa and Mastercard support AVS globally. In the United States, Visa incentivizes businesses to use AVS by providing a lower interchange rate when merchants perform an AVS check on transactions.

Editor’s note: Looking for a credit card processing solution for your business? Fill out the below questionnaire to be connected with vendors that can help.

4. Set up your account and terminal properly to lower fees.

A simple mistake may lead to higher credit card processing fees. Avoid this by setting up your account correctly from the start, advised Fenella Kim, founder and CEO of Reliance Star Payment Services. If you set up your account improperly, you risk incurring higher processing fees from providing incorrect business information.

“Setting up the account properly [impacts] how the fee structure works,” Kim explained. “The type of business, type of transactions, and frequency of transactions matters.”

Similarly, how your terminal is set up and used also affects processing fees. Kim suggests making a habit of processing transactions within 24 hours, which lowers the number of transactions for that period and thus reduces processing fees. [Check out our reviews of the best point-of-sale systems to help track sales and accept payments.]

“If you do your batch process every day, it is more cost-effective instead of every few days or a few times a week,” she said. “Don’t wait, [because] the longer you wait to process, the higher the fees and rates.”

Key TakeawayKey takeaway
Experts advise against leasing credit card machines. It's often more cost-effective for businesses to purchase credit card terminals outright for a few hundred dollars instead of leases that could add up to thousands.

5. Consult with a credit card processing expert to lower fees.

Most small business owners know little about credit card processing. Consider consulting a credit card processing expert to gain a better understanding — and an advocate. These professionals can debunk credit card processing myths, and their knowledge and relationship with processors can help you get lower rates for your business.

“Here is the secret that merchants are always shocked to find out: Regardless of their size or amount of volume, virtually all credit card processors buy their rates directly from Visa, MasterCard, and Discover for the exact same price,” said Robert Livingstone, president and founder of, a credit card processing consulting company. “Therefore, all credit card processors have the capability to resell these rates at the exact same price to different businesses.”

Knowing insider information like this can help small businesses gain an edge with vendors.

“Businesses are under the false impression that they have to keep switching their credit card processor in order to see savings,” Livingstone said. One reason is that when businesses call their current credit card processors to negotiate better rates, they’ll get almost nowhere.

Instead, Livingstone and his staff negotiate the lowest possible credit card processing fees with their existing vendors. “This means no switching or cancellation fees and zero downtime by switching from one processor to another,” Livingstone said. “If there is a savings, we split it with the client. If there is no savings, our services are free.”

Did You Know?Did you know
Your processor should facilitate in-person payments as well as contactless payments through radio-frequency identification, mobile credit card payments, e-commerce shopping carts, and payment gateways.

What are credit card processing fees?

Credit card processing fees are the fees your business pays each time a customer or client pays you via debit or credit card. Additionally, some card providers charge account and incidental fees that contribute to the overall cost of accepting credit and debit cards from your customers.

There are several different types of fees you pay to accept credit cards. 

Transaction rate fees

The primary cost to consider when shopping for a payment processor is its transaction rate. The rate is made up of three parts:

  1. Interchange fees: The credit card networks set interchange fees, which your bank pays to your customer’s bank for each purchase to offset transaction risks, such as card fraud and other handling costs. Your processor passes this charge along to you as part of your rate. This fee varies depending on your industry, the type of card your customer uses, the acceptance method, and the sale amount. Because card networks set these fees, everyone pays the same rates, and they’re nonnegotiable.
  2. Assessment fees: The card brands charge this fee so they can afford to allow customers to use their card brand. This fee also covers the costs of processing transactions on the card provider’s payment network. These fees usually are lower than interchange fees but are also nonnegotiable.
  3. Payment processor markup fees: This fee is the credit card processor’s margin on each transaction. It covers the processor’s operating expenses and profit. This is the only negotiable part of the processing rate.

Incidental fees

You may also encounter incidental and account service fees. Specific actions trigger incidental fees. Here are some examples:

  • Chargeback fee: If your customer disputes a transaction, you’re charged this fee. Some processors refund it if you win the dispute.
  • Batch fees: These are small daily fees that cover the costs of settling your daily deposits.
  • AVS fee: The AVS fee is the cost of using an anti-fraud tool that verifies the cardholder’s address and ZIP code. These fees are usually a few cents per transaction.
  • Voice authorization fee: Voice authorization is another anti-fraud tool in which the terminal prompts you to call the credit card company to offer additional information before it approves or declines the transaction. This doesn’t happen frequently, but when it does, you’re charged a fee.
Check out our review of Clover if you're a new business looking for the lowest fees, rates, and functionality for online orders, mobile payments, and more.

Account service fees

Processors charge account service fees to maintain your account. You may be able to negotiate some of these. Here are some examples:

  • Monthly fee: Also called a monthly statement fee, this covers the costs of the payment processors’ support services, such as monthly statement preparation and customer service.
  • Payment gateway fee: This is also charged monthly and covers the costs of using a payment gateway to accept credit cards online.
  • Payment Card Industry (PCI) compliance fee: Most processors require you to fill out an annual questionnaire to certify that you comply with PCI data security standards. Some provide assistance or insurance as part of their fees. This can be included in the monthly fee or charged separately, and some processors may be willing to waive it for you.
    PCI noncompliance fee: If you fail to maintain your PCI compliance, you are charged this fee monthly until you are in compliance.
  • Monthly minimum fee: Many service providers require you to process a certain dollar amount of transactions monthly or generate a specific dollar amount in processing fees. If you don’t meet that level, you are charged a monthly minimum fee.

Average credit card processing fees by major credit card network

Here are the average processing fees each major credit card network charges. Remember, these averages do not include the processor markup, which varies from one processor to another.


Average Credit Card Processing Fees


1.29% plus 5 cents to 2.54% plus 10 cents

Mastercard (transactions under $1,000)

1.29% plus 5 cents to 2.64% plus 10 cents


1.48% plus 5 cents to 2.53% plus 10 cents

American Express

1.58% plus 10 cents to 3.45% plus 10 cents

Understanding credit card processing fees puts you in control

As a business owner, you need to know where your money is going and what you can do to minimize expenses and keep your net business income healthy. By following these tips, you can ensure you don’t overpay credit card processing fees while still providing convenient payment options for your customers.

Sally Herigstad and Max Freedman contributed to the reporting and writing of this article. Some source interviews were conducted for a previous version of this article.

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Julianna Lopez, Business Operations Insider and Senior Writer
Julianna Lopez is a freelance writer, editor, and social media marketer. She loves all things New York, books, movies and theater.
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