Payment Processing 101
Understanding Your Credit Card Fees
The evolving world of payment processing may seem complicated, but it doesn’t have to be. Arm yourself with the fundamental knowledge—and leverage it to improve your business.
The Breakdown of Each Fee
(The breakdown below reflects industry standards.)
Interchange
What It Is
The amount paid to the card issuer (i.e. Chase Bank, PNC Bank) as compensation for expenses incurred in providing lines of credit to cardholders.
What It Pays For
Cardholder line of credit (including risk), cardholder statements, detailed reporting, rewards benefits.
Dues & ASSESSMENTS
What It Is
Flat amount paid to the credit card associations (i.e. Visa, Mastercard, Discover or American Express).
What It Pays For
Network infrastructure, establishment/maintenance of rules and pricing, research and development, marketing and branding.
Processor Fee
What It Is
The fee paid to the financial organization (i.e. i3 Commerce Technology) that handles the transaction.
What It Pays For
Communication costs, customer support, technical support, equipment downloads, risk/underwriting, statements/billing, product development, other overhead expenses.
Influence Your Fees Through Interchange
In an industry that’s blanketed with inconsistencies, it’s hard to know what factors
influence your interchange rate.
(Interchange makes up the majority of your credit card processing costs.)
Several factors determine what interchange rate a transaction qualifies for:
Contact i3 Commerce Technology for a Free Rate Review
Our payment processing advisors use best practices to earn our merchants optimal savings.
It’s one reason we rank in the top 5% in our industry for highest customer retention.
