If your business accepts credit or debit cards, you’ve undoubtedly come across a confusing array of fees. But how can they be broken down? And are the fees the same for everyone?
We at CardCorp recognise that merchant fees can be confusing. We’ve created this simple guide to help you understand what to expect and how to lower card payment fees.
Let’s take a closer look at the fees you might face and the choices you can make about them.
Merchant Account Fees: What Are They?
To take credit or debit card payments, your business must pay merchant account fees, which cover things like transaction processing, secure technology, and connections to banks and card companies.
To put it another way, it’s like paying a service fee for the infrastructure that enables you to accept online or remote payments. Without this setup, which consists of secure payment gateways, fraud prevention tools, and processing networks, you couldn’t accept card payments reliably or efficiently.
Your business type, sales volume, and the perceived level of risk in your industry all affect how much you pay. For example:
- A small neighbourhood café that primarily accepts cash typically pays less.
- Online betting sites, crypto exchanges, and dating services usually pay more because they’re seen as risky. There’s a greater chance of chargebacks, fraud, or other problems. To protect themselves, acquirers charge more in case they end up covering the merchant’s losses.
Therefore, knowing which category your business falls into helps you understand your merchant account fees.
Learn more in our guide to merchant accounts.
How Payment Fees Are Structured
The three main types of fees associated with card payments are interchange, assessment, and processor markup. These are the main components of your payment, but the way your provider presents them to you varies depending on their pricing strategy.
At CardCorp, we offer two options:
- Interchange++ Pricing – Transparent and itemised. Each fee type is listed separately, helping you see exactly where your money goes.
- Blended Pricing – Simpler and more predictable. All fees are bundled into one fixed rate, but this can cost more if your transactions are diverse or high volume.
In short, one model offers full visibility, the other offers simplicity. Now, let’s explore each in more detail.
Interchange++ vs. Blended Pricing
When setting up a merchant account with CardCorp, you have the option to choose between Interchange++ and Blended pricing models. Depending on your company’s requirements, each has unique benefits and considerations.
Interchange++ Pricing
In the Interchange++ model, fees are broken down into three parts:
1. Interchange Fees
These are charged by the cardholder’s issuing bank. Interchange fees are typically a percentage of the transaction value, and they vary based on factors such as:
- Card type (debit, credit, corporate, premium, etc.)
- Transaction type (in-store, online)
- Risk level (e.g. secure authentication used or not)
- Geography (domestic vs. cross-border)
2. Assessment Fees
These are paid to the card networks (like Visa or Mastercard) to cover the cost of authorising, clearing, and settling the transaction. They are usually small, fixed percentages or per-transaction fees and can vary by:
- Card brand
- Region (domestic vs. international)
- Transaction currency
3. Acquirer Markup (also known as Processor Fee)
This is the fee charged by your acquirer or payment processor. It covers the cost of providing payment services, including customer support, fraud prevention tools, and system maintenance. It can include:
- A fixed fee per transaction
- A percentage markup on top of interchange and scheme fees
This transparent model lets you see exactly what you’re paying for, making it ideal for high-volume or diverse businesses.
Blended Pricing
All of the underlying fees, including interchange, assessment, and processor markup, are consolidated into a single fixed rate under blended pricing. Regardless of the card type or transaction details, you always know what percentage you’re paying with this model.
Even though predictability can be helpful for budgeting, it has a price. You may wind up paying more than you need to because the rate is averaged to account for a variety of situations, such as higher-cost cards and international transactions. This is particularly likely to happen if the majority of your transactions are domestic or low-risk.
Blended pricing works best for businesses that:
- Prefer straightforward billing with no line-by-line breakdowns
- Handle a smaller volume of card transactions
- Are looking for ease of reconciliation over granular cost control
However, for businesses with a large or diverse transaction mix, Interchange++ is typically more cost-effective and transparent.
What’s a Rolling Reserve?
One kind of security deposit that guards against potential threats is a rolling reserve. As is common in high-risk industries, your provider withholds a portion of your sales for a specified period of time.
This is how it operates: Assume that this month you handle €10,000 in sales. The acquirer will hold €500 if your rolling reserve is 5%. Your money is not lost – the payment is simply delayed. If there have been no issues, that reserve is returned to you after 90 to 180 days.
Why do this? because certain industries experience chargebacks and refunds more frequently than others. Your acquirer has the capacity to handle unforeseen problems with your business using your rolling reserve. It also helps guarantee that your company can continue to function normally even in the event of issues.
We at CardCorp are open and honest about rolling reserves. These are only used when required and are set by the acquirer. To keep them equitable and in line with your processing volume, we always collaborate with you.
For more details, see our in-depth guide to high-risk merchant accounts.
What Are Chargeback Fees?
A chargeback occurs when a cardholder contacts their bank to dispute and reverse a credit card payment. Unlike a standard refund initiated by the merchant, a chargeback is a forced reversal, and it often comes with additional financial consequences. These may include:
- A chargeback fee charged by your acquirer or payment processor
- The loss of the original transaction amount, if the dispute is resolved in the cardholder’s favour
- Operational costs, such as the time and resources spent gathering evidence and responding to the claim
Even if the merchant successfully contests the dispute, the chargeback fee is typically non-refundable.
Why Chargebacks Matter – And How to Keep Them Under Control
Chargebacks can occur for several reasons, including:
- The customer didn’t receive the product or service
- The item didn’t match the description
- The customer didn’t recognise the charge
- The card was used fraudulently without their consent
Each chargeback typically comes with a fee of €15 to €30, and if your business receives too many, the consequences can be serious.
Your company could be:
- Flagged by card schemes (like Visa or Mastercard)
- Charged higher processing fees by your acquirer
- Classified as high risk, making it harder and more expensive to process payments
- In extreme cases, lose the ability to accept card payments altogether
That’s why keeping your chargeback rate low is so important. CardCorp helps you stay ahead with:
- Real-time transaction tracking
- Intelligent chargeback alerts
- Expert support to reduce disputes and protect your revenue
The fewer chargebacks you receive, the more stable and cost-effective your payment setup becomes.
For more tips, read our full guide on preventing fraud and chargebacks.
How to Prevent PCI Compliance Fees
You might be assessed PCI compliance fees if you fail to handle cardholder data securely. Any company that handles, transmits, or stores cardholder information must comply with these requirements, which are derived from the Payment Card Industry Data Security Standard (PCI DSS).
PCI compliance fees, which normally range from €10 to €30 per month, or even harsher penalties in the event of a data breach could be imposed on you if you break these rules.
Even if you are completely compliant, some payment processors charge PCI compliance fees. At CardCorp, we do things differently: we give you the resources you need to stay on course and assist you throughout the compliance process.
Most importantly, we don’t charge any PCI compliance fees as long as you take the necessary actions to maintain compliance.
Need help? Check out our PCI compliance guide for simple steps to stay secure.
Additional Fees for Card Payments You Should Be Aware of
In addition to the core fees, some providers charge extra fees. These could include:
- Monthly merchant account fees – A basic cost just to keep your account active. Usually €10 to €30.
- Gateway fees – These apply if you take payments online. You pay for access to the system that connects your website to the payment networks. Learn more in our payment orchestration guide.
- Early termination fees – Some providers charge a fee if you close your account before the end of your contract.
CardCorp supports transparent pricing. We disclose all of our merchant fees up front to avoid any unpleasant surprises.
Not sure if your provider is doing enough? Read our article on payment processor red flags.
Simple Strategies to Reduce Your Merchant Fees
Reducing your merchant fees doesn’t have to be difficult. Here are some simple guidelines:
- Reduce the number of chargebacks. Clearly state what you sell. Provide excellent customer service. Ensure that clients are aware of how charges will show up on their statement.
- Maintain PCI compliance by keeping your payment systems safe. Adhere to best practices and check the compliance of your suppliers.
- Verify what you have paid. Examine your monthly processing fees for payments as part of your reconciliation procedure. Funding reports from integrated acquirers make this simple with CardCorp Hub.
- Select an appropriate partner. A competent supplier can assist you in avoiding needless expenses. CardCorp has experience with both low-risk and high-risk businesses. We can lower your overall merchant account fees and assist you in risk management.
Small changes can add up to significant savings, and your control will increase as you gain a better understanding of your credit card processing fees.
See our merchant account approval guide for high-risk businesses to learn how to get approved.
CardCorp is an independent sales organisation (ISO) – but what does that actually mean for your business? Here’s how partnering with an ISO like CardCorp benefits you, and what to expect from the process.
Final Thoughts
Although they have expenses, card payments aid in the expansion of your company. Knowing more about these expenses can help you make better decisions and retain a larger portion of your earnings.
At CardCorp, we strive to provide clear, reasonable pricing along with all the assistance you require. We can assist you regardless of how big or small your business is. Additionally, we will collaborate with you to find a solution that meets your needs if you work in a high-risk industry.