Credit card processor fees


What is a cost of using a credit card processor? How much does it cost to set up for a small startup (lets say, a small store or a restaurant), what are the fees of using the processor, and what are the fees per transaction processed? Are there any websites that give some concrete informations on this subject, or is it more of a case-by-case basis?

Startup Costs Cost Credit Cards

asked Oct 16 '11 at 04:42
The Piachu
113 points

3 Answers


There are two basic types of rates
Card Present and Card Not Present. Not surprisingly the Not Present rate is significantly higher than the Card Present rate. Fees will vary significantly and can be dependent on factors such as Type of Business, Average sale amount, Annual volume, Card Type (you will pay more for a mileage card than a standard card). You can get an idea of interchange rates at Visa. If you are starting a brick and mortar business, one of the best places to start can be your bank. They can coordinate the entire process and while you may not get the best rate, the integration and ease of implementation may be worth it. The better idea you have about annual volume the easier it will be to make a decision (is it better to pay an annual fee or save .01%)

answered Oct 16 '11 at 05:16
96 points


Overall in the US when it comes to merchant processing you usually can buy through a vendor, use a service like PayPal/Square, or go through a bank.

In a nutshell here's some specifics I've gotten from my own personal experiences after getting numerous quotes a few months ago (but I can be wrong)

First off, banks and brokers: Typically they'll offer you free equipment, but they lock you into a 3 year (yes, that's three years) or two year contract. Monthly fees might be $25/$30 per account, and online gateways are typically free depending on your business type (eCommerce or brick and mortar)

Rates per transaction: usually it's $0.27 per transaction plus - 1.7% for a keyed PIN/Debit, 2.9% for card present swipe (or debit card with credit specified), and for card not present (think online or phone order) it's 3.2% about.

Next you have PayPal which although is great because there's no contract, they slam you with high rates. The default plan usually charges you $0.27 per transaction and then 3.2% for any credit/debit purchase online.

PayPal also has a $30/month plan (no contract) where you get a virtual terminal, and I think the rates drop down a tad to $0.25 per transaction and 2.7% added on. This also covers phone orders and punching in the info into your computer by hand (via the web software).

PayPal also offers fairly simple site integration out of the box, so that can be a huge plus despite the high costs overall (vs. going to a normal processor)

Finally there's square which is simply: 2.7% swiped, and 3.2% punched in

Overall the rates you're charged are subject to a credit check (except with PayPal free, and Square) and then they ask about transaction size/volume, revenue, and a bunch of other company specific data, but overall the figures above are typically average.

AmEx though usually has a different percentage fee than the others (it's higher, which is why it's not as popular as MC/Visa), but your provider will list that in the quote.

Finally, when you are shopping around for vendors, don't opt for the credit check until the final stages because I think it counts as a hard-pull and if you own an LLC (or even Corporation) sometimes they run your personal record rather than the company (depending on how long you've been in business).

If you really wanted to play it safe, you could print a copy of you credit score from and pay the $8 for your FICO score so when you meet with processors, you can show them the report and they'll use that for ballparks until you make a final decision after which the provider will do the official credit check.

answered Oct 16 '11 at 21:48
397 points


Credit card processing is definitely a complex, but essential issue for any startup hoping to generate revenue online (eCommerce, SaaS, etc).

I've heard about a cool company called Fee Fighters that help deal with this issue. They help ensure that you're paying the lowest fees possible, and also help you navigate and understand the entire credit card processing system.

I've never used them personally, but I've heard good things.

answered Oct 16 '11 at 06:38
Hartley Brody
1,317 points

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