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Credit card processing fees explained

By Chris Ste-Marie, Founder of AllProPay · Updated October 24, 2026

A processing fee is three things stacked together, plus a pile of small charges that quietly add up. Once you can name them, no one can hide them from you again.

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No statement handy? Tell us what you pay and who processes for you, we’ll take it from there.

The three parts of a processing fee

  • Interchange. Set by the bank that issued the customer’s card. It changes by card type: a rewards card costs more than a basic debit card. Usually the biggest part, and no processor can lower it.
  • Assessments. Set by the card brands. Small and the same for everyone.
  • Processor markup. What your processor adds on top. The part that varies between providers, and the part you can compare.

Interchange and assessments don’t change with who you sign with. So a low advertised rate is really competing on the markup, plus the monthly fees below.

What a processing fee is made of: a statement whose left side is a to-scale bar A stylized merchant statement with four fee lines. Down its left side runs a slim bar split to scale, and each fee line sits in a band as tall as its share of the total. Interchange and card-brand assessments 1.81%, pass-through, same with every processor, the tallest band. Processor markup 0.62%, the part you compare. Non-qualified downgrades 0.71% and monthly junk fees 0.28%, both flagged avoidable. Effective rate 3.42%; with the two flagged lines removed, 2.43%. Side cards group the lines into same everywhere, compare this, and remove these. Processing fee summary Each line as a share of card sales, so the lines add up. EXAMPLE STATEMENT REVIEW TO SCALE RATE Interchange and card-brand assessments Set by the banks and card brands. Same with every processor. 1.81% Interchange, set by the bank that issued the card Assessments, set by the card brands Processor markup What the processor adds on top. The only line that varies between providers. 0.62% "Non-qualified" downgrades AVOIDABLE An advertised low rate that quietly jumps on most of your transactions. 0.71% Monthly junk fees AVOIDABLE Statement, PCI, batch and other padding. 0.28% Effective rate What you actually pay on every dollar, once every fee is counted. 3.42% With the two flagged lines removed 2.43% Hold your own statement next to this. The bar down the left side is to scale: the taller the band, the bigger the cost. SAME EVERYWHERE Pass-through, set by the banks and card brands. No processor can lower this line. COMPARE THIS The one line that differs between providers. Ask for it in writing. REMOVE THESE Not bank costs. A statement review shows which of these can come off, and the total drops with them. Numbers from the example statement review on allpropay.com. Illustration, not a quote. Same with every processor The part you compare Flagged, avoidable or padded

What’s different in Canada

  • Interac. Most businesses take a lot of Interac debit. It runs on its own network and should be priced far below credit. Paying a credit-card rate on an Interac tap is one of the most common ways money leaks out, especially on flat-rate apps that charge one blended percentage for everything.
  • Capped credit interchange. Credit-card interchange in Canada is set by the card brands and capped under federal commitments, so the cost of accepting Visa and Mastercard is more contained than it once was. That makes the markup and the monthly fees the place to look.

How the networks price differently: Interac and card fees in Canada.

The monthly and junk fees to watch

None is huge on its own. Together they can add up over a year:

  • PCI compliance or non-compliance fee. A data-security charge. The non-compliance version is often avoidable once your account is validated.
  • Monthly or statement fee. A flat charge just to have the account.
  • Batch fee. Charged each time you settle the day's transactions.
  • Gateway fee. For routing online or keyed payments.
  • Monthly minimum. A charge if your processing doesn’t reach a set threshold.
  • Regulatory or network access fees. Pass-through charges that are sometimes padded above their true cost.
  • Early termination or cancellation fee. A penalty for leaving inside a contract. We don’t use these.

How to tell a fair fee from a junk fee

  • A fair fee is one you can see and understand, and it reflects a real cost.
  • A junk fee is vague, padded, or there only because most businesses won’t question it.
  • The test: can the processor explain the fee in one sentence and show you what it covers? If not, question it.

What you can actually change

  • You can’t change interchange or assessments.
  • You can change the markup and most of the monthly fees.
  • You can avoid contracts and cancellation fees entirely.

Whether switching is worth it comes down to your numbers. The cleaner path is transparent interchange-plus pricing first: pay a fair markup, price Interac as Interac, and let the lower base cost do the work.

Offered surcharging or cash discounting to offset fees? Treat it carefully in Canada. Surcharges are capped, must be disclosed to the customer with clear notice, are never allowed on Interac debit, and aren’t permitted at all in Quebec.

Send us one recent statement and we’ll sort every line into interchange, assessments, markup, and junk, then show you which ones could come down. It’s free, and if the math doesn’t favour switching, we’ll tell you.

Common questions

What are the three parts of a processing fee?
Interchange (set by the card-issuing bank), assessments (set by the card brands), and the processor markup. The first two are the same for everyone. The markup is the part that varies and that you can compare.
What is a PCI non-compliance fee?
A monthly charge tied to data-security compliance. Once your account is validated correctly, the non-compliance version is often avoidable.
Are processing fees negotiable?
Interchange and assessments aren’t. They’re set by the banks and card brands. The processor markup and many monthly fees can be lowered or removed. A free statement review shows which of your fees are which.

See your fees sorted and named

Send one statement and we’ll separate the real costs from the junk. Free, no pressure.

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