Payment gateway fees vary by processor, transaction type, and your sales volume, but most small businesses pay between 2.2% and 3.5% per transaction plus a flat fee of $0.20 to $0.30
There is no single "right" price for a payment gateway because fees depend on what you sell, how you sell it, and which processor you choose. A coffee shop taking card payments in person pays differently than a SaaS company billing monthly subscriptions or an e-commerce store shipping nationwide. The processor sets the base rate, but your negotiating power, sales volume, and the type of card being used all move that number up or down.
The cost you actually pay is the sum of three separate charges: the interchange fee (set by Visa, Mastercard, or Amex and paid to the cardholder's bank), the assessment fee (a small percentage paid to the card network), and the processor markup (what the gateway company keeps). You cannot negotiate the first two, but you can shop the third.
Key Takeaways
- Most payment gateways charge a percentage per transaction (2.2% to 3.5%) plus a flat fee per transaction ($0.20 to $0.30), and these rates vary by card type and whether the card is present or not.
- Interchange and assessment fees are set by card networks and are the same across all processors; only the processor's markup is negotiable.
- High-volume sellers (over $10,000 per month) often get better rates than low-volume sellers, and some processors offer tiered pricing that improves as you grow.
- Monthly minimums, statement fees, batch fees, and PCI compliance charges can add $10 to $100+ per month on top of per-transaction costs.
- Comparing two gateways requires knowing your average transaction size, monthly volume, and card mix—not just the advertised percentage rate.
How the three-part fee structure breaks down
When a customer swipes a card, three entities take a cut. The interchange fee is typically 1.3% to 2.3% of the transaction and goes to the customer's bank (Visa and Mastercard do not keep it). This fee is the same no matter which processor you use—it is set by the card networks and changes quarterly. A Visa debit card in-person has a different interchange rate than a Mastercard credit card online, which is different again from an American Express card.
The assessment fee is smaller, usually 0.11% to 0.13%, and goes to Visa or Mastercard themselves. Again, this is fixed and non-negotiable. Together, interchange plus assessment typically add up to 1.5% to 2.5% of your transaction.
The processor markup is what you actually negotiate. This is the payment gateway company's profit margin, and it ranges from 0.5% to 1.5% depending on the processor and your deal. A processor might quote you "2.9% + $0.30," which means you pay 2.9% of the transaction total plus 30 cents per transaction. That 2.9% includes interchange, assessment, and their markup bundled together—you do not see the breakdown on your statement, but it is there.
Typical pricing models and what they cost in practice
Most payment gateways use one of three pricing structures: interchange-plus, tiered, or flat-rate.
Interchange-plus is the most transparent. The processor shows you the actual interchange rate for each transaction, adds their markup (usually 0.5% to 0.8%), and charges a per-transaction fee of $0.10 to $0.25. This model is common among processors like Stripe, Square, and PayPal for online sales. If your average transaction is $50, you pay roughly $1.45 to $1.75 per transaction. If your average is $500, you pay $14.50 to $17.50. The percentage stays the same, but the dollar impact scales with your ticket size.
Tiered pricing bundles interchange into three or four buckets: may have access to (lowest rate, usually Visa debit), mid-may have access to (most credit cards), and non-may have access to (Amex, international cards, or manually entered cards). A processor might quote "2.19% may have access to / 2.49% mid-may have access to / 2.99% non-may have access to + $0.25." The catch is that you do not control which tier a card falls into—the processor decides based on the card data. This model often costs more than interchange-plus because the non-may have access to tier is inflated to cover the processor's risk.
Flat-rate pricing charges the same percentage and fee for every transaction, regardless of card type. Square's standard rate is 2.6% + $0.10 per in-person transaction, or 2.9% + $0.30 for online. Flat-rate is easy to budget for and works well for small businesses with low volume, but it costs more than interchange-plus if you process a lot of debit cards or in-person transactions (which have lower interchange rates).
Hidden fees that add up fast
The per-transaction rate is only part of the bill. Most gateways charge additional fees that do not show up in the advertised rate:
- Monthly minimum: Some processors charge $10 to $25 per month even if you process nothing. This is most common with interchange-plus pricing.
- Statement fee: A few processors charge $1 to $5 per month just to send you a statement.
- Batch fee: Older gateways charge $0.25 to $1 per batch (a batch is usually one day's worth of transactions). Modern processors have eliminated this.
- PCI compliance fee: Some charge $10 to $30 per month for PCI DSS compliance, though many now include it.
- Chargeback fee: When a customer disputes a charge, the processor charges you $15 to $100 to handle it, on top of the refund itself.
- ACH or bank transfer fee: If you move money to your bank account via ACH, some processors charge $0.25 to $1 per transfer.
- Setup or onboarding fee: A few charge $50 to $500 to set up your account, though this is rare now.
For a business processing $5,000 per month with a 2.9% + $0.30 rate, the per-transaction cost is roughly $145 to $155. Add a $15 monthly minimum, a $10 PCI fee, and one $25 chargeback, and your actual monthly cost is $195 to $205—a 30% increase over the advertised rate.
How volume and card type affect your real rate
Two businesses with the same processor can pay very different effective rates. A coffee shop taking mostly in-person debit cards (low interchange) pays less than an online boutique taking mostly credit cards (high interchange), even if both are quoted "2.9% + $0.30."
Volume also matters. Processors often negotiate lower rates for businesses processing over $10,000 per month. Stripe, for example, does not advertise volume discounts, but Square and traditional processors like First Data or Global Payments will negotiate if you ask. A business processing $50,000 per month might get 2.4% + $0.25 instead of 2.9% + $0.30—a savings of $250 per month.
Card type is the biggest variable. In-person debit card transactions have interchange rates around 0.5% to 1.15%. In-person credit cards run 1.51% to 2.22%. Online credit cards are 1.66% to 2.22%. Manually entered cards (keyed-in, no swipe or chip) jump to 1.66% to 2.22% plus a 0.25% surcharge. American Express is separate and typically 2.5% to 3.5% depending on the card type. If 80% of your sales are in-person debit, your effective rate will be much lower than if 80% are online Amex.
Comparing two gateways side by side
To compare processors fairly, you need to know three things about your business: your average monthly volume in dollars, your average transaction size, and the mix of card types you accept (what percentage are in-person vs. online, debit vs. credit, Amex vs. Visa/Mastercard).
Then calculate the total cost for each processor using a real month of data. Do not just compare the advertised rate. For example:
| Processor | Advertised Rate | Monthly Volume | Per-Transaction Cost | Monthly Fees | Total Monthly Cost | Effective Rate |
|---|---|---|---|---|---|---|
| Processor A (Interchange-plus) | 1.5% + $0.10 + interchange | $10,000 (100 transactions) | ~$165 | $15 minimum | $180 | 1.8% |
| Processor B (Flat-rate) | 2.9% + $0.30 | $10,000 (100 transactions) | $320 | $0 | $320 | 3.2% |
| Processor C (Tiered) | 2.19% / 2.49% / 2.99% + $0.25 | $10,000 (100 transactions) | ~$245 | $10 PCI | $255 | 2.55% |
In this example, Processor A costs the least, but only if you have a mix of card types that keeps your average interchange rate low. If 80% of your transactions are online credit cards, your per-transaction cost at Processor A might jump to $200, making Processor C cheaper. The advertised rate alone tells you nothing.
When to negotiate and what leverage you have
Most small businesses do not negotiate because they do not know they can. Stripe and Square do not negotiate—their rates are fixed. But traditional processors like First Data, Global Payments, Worldpay, and most local merchant services companies will negotiate if you have volume or if you are switching from a competitor.
Your leverage depends on your monthly volume and your willingness to switch. If you process $50,000 or more per month, you can ask for a rate reduction. Bring your current processor's statement and ask the new one to beat it by 0.1% to 0.2%. If you process less than $10,000 per month, you have little leverage, and the processor knows it—your cost to them to onboard you is higher than your monthly revenue.
One exception: if you are a nonprofit or a high-volume charity, some processors offer discounts. Stripe Nonprofit and PayPal Giving Fund both reduce rates for registered nonprofits. If you may have access to, ask.
Frequently Asked Questions
Is 2.9% + $0.30 a good rate?
It depends on your card mix and volume. For a low-volume online business with mostly credit cards, it is reasonable. For a high-volume in-person business with mostly debit cards, you are overpaying—you could get 1.8% to 2.2% with interchange-plus pricing. Compare your actual monthly cost across three processors before deciding.
Can I pass the payment processing fee to my customer?
Yes, but with limits. You can add a surcharge for credit card payments in most states (typically 2% to 4%), but you cannot surcharge debit cards or American Express in most places. Some states cap surcharges at 4%. Check your state's rules and your processor's terms—some prohibit surcharges even where legal.
What is the difference between interchange-plus and flat-rate pricing?
Interchange-plus shows you the actual card network fee plus the processor's markup separately, so you see exactly what you are paying for each transaction. Flat-rate bundles everything into one percentage, making it simpler to budget but usually more expensive if you process a lot of low-cost transactions or debit cards.
Do I have to pay a monthly minimum?
Not all processors charge one. Stripe, Square, and PayPal do not. Traditional processors and some interchange-plus gateways do. If you process less than $500 per month, a monthly minimum can double your effective rate, so choose a processor without one.
What happens if I get chargebacks?
Every processor charges a chargeback fee ($15 to $100 per dispute) on top of refunding the customer. You also lose the original transaction fee. If chargebacks exceed 1% of your transaction volume, some processors will terminate your account. Keep dispute rates below 0.5% by shipping promptly, using clear descriptions, and responding to disputes quickly.