Payment gateway fees usually run between 2.2% and 3.5% of the transaction amount, plus a flat fee of 20 to 30 cents per transaction

The exact cost depends on which gateway you use, what type of card is swiped, and whether you process in person or online. Visa and Mastercard set the interchange rate (the cut that goes to the card issuer), and the gateway adds its own markup on top. A $100 online purchase on a standard Visa might cost you $2.90 to $3.50 in fees; the same transaction with an American Express card could cost 3.5% or more because Amex charges higher interchange rates.

If you are a consumer making a payment, you rarely see these fees directly—the business absorbs them. But if you run a business, accept payments, or use a payment gateway to collect money from customers, these fees come out of what you receive. Understanding the structure matters because small differences in rate add up fast across hundreds of transactions.

Key Takeaways

  • Most payment gateways charge between 2.2% and 3.5% plus 20 to 30 cents per transaction, but the exact rate depends on the card type and how the transaction is processed.
  • Interchange rates—the portion that goes to the card issuer—are set by Visa, Mastercard, Discover, and Amex, and gateways cannot negotiate these down.
  • Online transactions, phone orders, and in-person card-present transactions have different fee structures because card-not-present transactions carry higher fraud risk.
  • Monthly minimums, batch fees, and PCI compliance charges can add hundreds of dollars annually on top of per-transaction costs.
  • Flat-rate gateways charge the same percentage on every transaction regardless of card type, which can save money for high-volume Amex users but costs more for standard Visa transactions.

How the fee breaks down: interchange, assessment, and gateway markup

A single transaction fee is actually three separate charges stacked together. The interchange rate goes to the card issuer (your bank if you used a Visa card). Visa and Mastercard set these rates—they vary by card type (rewards cards cost more than basic cards) and by how the transaction happened (swiped in person costs less than entered online). Interchange typically accounts for 1.5% to 2.2% of the transaction.

The assessment fee is a smaller cut that goes to Visa, Mastercard, Discover, or Amex themselves—usually 0.11% to 0.13%. This is non-negotiable; every processor pays the same assessment.

The gateway markup is what the payment processor (Stripe, Square, PayPal, etc.) keeps for themselves. This is where competition happens and where you have choices. Markup typically ranges from 0.3% to 1% plus the flat per-transaction fee. A processor might advertise "2.9% + 30¢" which means 2.9% markup plus the 30-cent flat fee, but the actual charge to you will be higher once interchange and assessment are added in.

Card-present versus card-not-present transaction rates

If you swipe or tap a physical card in front of the customer, the interchange rate is lower because fraud risk is lower—the card is verified in real time. A standard Visa card-present transaction might cost 1.51% interchange plus assessment and markup, totaling around 2.2% to 2.5%.

If the card number is typed in online, over the phone, or through a payment link, the transaction is card-not-present. Interchange rates jump because the card issuer bears more fraud risk. The same Visa card might cost 2.19% interchange in a card-not-present scenario. For American Express, card-not-present transactions can reach 3.5% or higher.

This is why online retailers and subscription services pay more per transaction than brick-and-mortar stores. If you run an e-commerce business, your per-transaction cost will be noticeably higher than a coffee shop's.

Flat-rate gateways versus interchange-plus pricing

Some processors offer flat-rate pricing: a single percentage that applies to every transaction, regardless of card type. Square, for example, charges 2.6% + 10¢ on all card transactions, whether it is a basic Visa or an Amex rewards card. This simplifies accounting and protects you if your customer mix shifts toward expensive cards.

Other processors use interchange-plus pricing, where you pay the actual interchange rate (which varies by card) plus a fixed markup. Stripe and many payment processors for larger businesses use this model. You see the breakdown: 1.51% interchange + 0.3% Stripe markup + assessment + 30¢ flat fee. This is cheaper if most of your transactions are standard Visa or Mastercard, but more expensive if you process a lot of Amex or rewards cards.

For a business processing mostly basic credit cards, interchange-plus is usually cheaper. For a business with unpredictable card mixes or high Amex volume, flat-rate may be simpler and sometimes cheaper overall. Run the numbers with your actual transaction history before switching.

Hidden fees beyond the per-transaction charge

The per-transaction percentage is not the only cost. Most gateways charge a monthly minimum fee (often $20 to $30) even if you process nothing that month. Some charge a batch fee (a few cents per day you settle transactions). If you do not meet a monthly volume threshold, you may pay a low-volume fee.

PCI compliance fees are common—typically $10 to $30 per month to maintain security certification. Gateway setup fees can run $50 to $300 when you first sign up. Some processors charge for chargebacks (when a customer disputes a transaction), usually $15 to $25 per chargeback, on top of refunding the transaction amount.

If you use a virtual terminal to process payments manually, or if you need reporting tools or recurring billing, those features may carry separate monthly fees. A business processing $5,000 per month might pay $150 to $200 in fees total—$50 to $100 in per-transaction charges plus $50 to $100 in monthly minimums and add-ons.

Why American Express costs more

American Express sets its own interchange rates and does not participate in the Visa or Mastercard networks. Amex interchange rates are typically 2.5% to 3.5% or higher, compared to 1.5% to 2.2% for Visa. Amex also charges a higher assessment fee. If you accept Amex, expect to pay noticeably more per transaction.

Some businesses pass this cost to customers by adding a small surcharge for Amex payments, though this is regulated in some states and prohibited in others. Others absorb the cost as a cost of doing business. If Amex represents a small percentage of your transactions, the impact is minimal. If it is 20% or more of your volume, the extra cost becomes significant.

How to compare payment gateways on actual cost

Do not compare gateways by advertised rate alone. A processor advertising "2.9% + 30¢" is showing you only the markup, not the full cost. To compare fairly, gather three months of your actual transaction data: total volume, number of transactions, card type breakdown (Visa, Mastercard, Amex, Discover), and whether transactions are card-present or card-not-present.

Then calculate the total fee each processor would charge on that actual history. Stripe's interchange-plus model might cost $450 on your mix; Square's flat rate might cost $520. The difference is real money, and it is the only number that matters. Also factor in monthly minimums, batch fees, and any features you actually use.

Ask each processor for a sample invoice showing the full breakdown—not just the advertised rate. This shows you exactly what you will pay and makes comparison possible.

Frequently Asked Questions

Do I pay the gateway fee if a customer uses a debit card instead of a credit card?

Yes, but the rate is usually slightly lower. Debit card interchange rates are typically 0.05% to 1.5%, depending on whether it is a PIN-based or signature-based transaction. The gateway still charges its markup and assessment on top, so the total is still a percentage plus a flat fee, just smaller than a credit card would be.

What happens if a customer disputes a charge—do I pay the gateway fee twice?

No, but you do pay a chargeback fee (usually $15 to $25) on top of refunding the full transaction amount. You lose the original transaction fee and the product or service, plus the chargeback fee. This is why fraud prevention and clear billing descriptions matter—they reduce disputes.

Can I negotiate payment gateway fees with my processor?

You cannot negotiate interchange or assessment rates—those are set by the card networks. You can sometimes negotiate the gateway's markup if you process high volume (usually $50,000+ per month). Smaller businesses have little leverage; your best option is to choose a processor with low markup to begin with.

Why do some gateways charge per transaction and others charge a monthly subscription?

Subscription-based gateways (common for SaaS platforms) bundle transaction fees into a monthly cost. This works well if you have predictable volume. Per-transaction gateways are better if your volume varies month to month, because you only pay for what you process. Calculate both models against your actual volume to see which is cheaper.

Do payment gateway fees apply to refunds?

No. When you refund a transaction, the original transaction fee is not reversed, but you do not pay a new fee on the refund itself. You lose the fee from the original sale. This is another reason to get the transaction right the first time.