# Understanding Your Payment Costs Source: https://paymentsandrisk.com/docs/learning-pathways/reducing-costs/understanding-your-costs Last updated 22 October 2026. TL;DR - Fees look high? Start with [Your First Cost Audit](https://paymentsandrisk.com/docs/learning-pathways/reducing-costs/understanding-your-costs/#your-first-cost-audit). - **Three layers of fees.** Interchange goes to the customer's bank, assessments go to Visa and Mastercard, markup goes to your processor. - **Only processor markup is negotiable.** The networks set the rest. - **Your effective rate** is total fees divided by total volume. It's the only number that matters. - **On a $50 card-present ticket, flat rate costs about 95 basis points more than a published interchange-plus band.** That's $238.50 a month at $25,000 of volume. Below about a $9.23 ticket the flat rate wins instead. - Every figure here uses one blended pass-through. That's 1.03% + $0.178 card-present and 1.50% + $0.172 online. See [Cost Model Assumptions](https://paymentsandrisk.com/docs/payments/reference/cost-model-assumptions/). Payments Chargebacks Fraud Operations Costs Pathway 5: Costs · Lesson 1 of 3 7 min read Several companies take a cut of every card payment, some of it fixed and some of it negotiable, and knowing which is which is the whole job. ### Where Your Money Goes Charge a customer $100 online and the fees break down like this. The interchange range is wide. It depends entirely on which card the customer hands you: | Fee Layer | Who Gets It | On a $100 online sale | Can You Negotiate? | | --- | --- | --- | --- | | **Interchange** | Customer's bank (issuer) | $0.27 on a regulated debit card, $2.89 on a commercial card, **$1.51 on this site's blended mix** | No, set by Visa/Mastercard | | **Assessments** | Card networks (Visa/Mastercard) | about **$0.16**, modelled at 0.14% + $0.02 and **unverified** - neither network publishes a US assessment schedule | No, set by networks | | **Processor markup** | Your processor | $0.15 - $0.50 on interchange-plus, buried inside the headline rate on flat rate | **Yes** | | **Total** | | $0.58 - $3.55 across card types, **$1.82 - $2.17 on the blended mix** | | Interchange and assessments together are what this site calls pass-through. Every worked example below uses one figure for it. That's **1.50% + $0.172 online and 1.03% + $0.178 card-present**. Where those come from, and which inputs are dials rather than published rates, is in [Cost Model Assumptions](https://paymentsandrisk.com/docs/payments/reference/cost-model-assumptions/). Interchange is the biggest chunk. You can't negotiate it. You can control which interchange rate applies, though. And you can negotiate your processor's markup. ### Why Different Cards Cost You Different Amounts A basic debit card costs far less to accept than a premium rewards card. The same card also costs more online than it does in person: | Card Type | Card-present interchange | Online interchange | Why | | --- | --- | --- | --- | | Regulated debit (US) | 0.05% + $0.22 | 0.05% + $0.22 | Issuer holds over $10B in assets, so the Durbin Amendment caps it | | Exempt debit (US) | 0.80% + $0.15 | 1.65% + $0.15 | Smaller issuer, no cap applies | | Interac debit (Canada) | ~$0.05-$0.10 flat | Separate product | Canadian debit network, flat fee per transaction | | Consumer credit, no rewards | 1.51% + $0.10 | 1.89% + $0.10 | Plain card, nothing to fund | | Standard rewards credit | 1.65% + $0.10 | 2.05% + $0.10 | You're funding someone's cashback | | Premium rewards credit (Signature Preferred) | 2.10% + $0.10 | 2.50% + $0.10 | You're funding someone's airline miles and lounge access | | Top consumer tier (Visa Infinite, MC World Elite) | 2.30% + $0.10 | 2.60% + $0.10 | The most expensive consumer card either network issues | | Commercial / corporate | 2.26% + $0.10 | 2.79% + $0.10 | Higher limits, richer rebates to the cardholder's employer | | Non-qualified | 3.15% + $0.10 | 3.15% + $0.10 | What you pay when a transaction fails qualification | US figures come off Visa's published schedule dated 18 April 2026, cross-checked against Mastercard's dated 17 April 2026. Both networks publish the same number at every bound that matters, so nothing here is Visa-anchored. "Rewards credit, 1.80% + $0.10" is not a card mix average Plenty of comparison content uses **1.80% + $0.10** as the average interchange for a whole business. It isn't an average. It's one card type. That card is a consumer rewards credit card. Use it as a blend and you overstate card-present cost by about 79 basis points. On $20,000 a month that's roughly $159 of cost that doesn't exist. All of it lands on the interchange-plus side of the comparison. Every number on this page now uses one blended pass-through instead. That's 1.03% + $0.178 card-present, 1.50% + $0.172 online. See [Cost Model Assumptions](https://paymentsandrisk.com/docs/payments/reference/cost-model-assumptions/). You can't tell customers what card to use. But this explains why your effective rate moves month to month. A month with more corporate card orders costs you more. ### The Three Pricing Models (Know Which One You're On) **Flat rate (Square, Stripe, PayPal, Shopify Payments)** - Same rate on every transaction. Square Free is 2.6% + 15c in person and 3.3% + 30c online ([squareup.com/us/en/payments/our-fees](https://squareup.com/us/en/payments/our-fees), verified 2026-08-02). - Simple and predictable. - You overpay on cheap cards like debit. You underpay on expensive ones like corporate. - Best for: anyone who wants a predictable number more than the lowest number. **Interchange-plus (Helcim, Stax, most traditional processors)** - You pay actual interchange plus a published or negotiated markup. Helcim's entry band is interchange + 0.40% + 8c in person, with **no monthly fee** ([helcim.com/pricing](https://www.helcim.com/pricing/), verified 2026-08-02). - Your rate varies by card type. The markup stays the same. - Most transparent. Cheapest in 20 of the 24 channel, ticket and volume scenarios this site models. - Best for: most merchants above roughly a $9 card-present ticket. There's no volume threshold to reach first. The exception is a card mix that runs unusually rewards-heavy. Where the crossover actually sits Square Free and Helcim's entry band cost the same at one point. That point is **your interchange alone averaging 2.06% + 5c**. Add the 0.14% + $0.02 of network assessments this site models and it's 2.20% + 7c. Those assessments are unverified. So check which of the two your statement shows you before you compare. On the blended card-present mix this site publishes, the two are equal at a **$9.23 ticket**. Above it Helcim is cheaper. Below it Square is. That single number hides a lot, though. The crossover moves with the card: | Card the customer hands you, in person | Helcim is cheaper above | | --- | --- | | Exempt debit | $7.94 | | Regulated debit | $8.46 | | Consumer credit, no rewards | $9.09 | | Standard rewards credit | $12.20 | | Premium rewards credit | Never. Square is cheaper at every ticket | | Commercial / corporate | Never. Square is cheaper at every ticket | The "unusually rewards-heavy" caveat is real, and it has a shape. Add Helcim's 0.40% + 8c to the pass-through on a premium rewards card and you get 2.64% + 20c. Square's 2.6% + 15c is lower on both components. No ticket size rescues that. A debit-heavy retail mix is nowhere near the line. A B2B business running mostly commercial cards sits on the wrong side of it permanently. That's also why the old "wait until $20K a month" rule is dead. It was built for interchange-plus products that charged a monthly fee. Helcim's entry band charges none. So the answer depends on your card mix and your average ticket, not your volume. Full method in [Cost Model Assumptions](https://paymentsandrisk.com/docs/payments/reference/cost-model-assumptions/). **Tiered/bundled (avoid)** - Your processor sorts transactions into "qualified", "mid-qualified" and "non-qualified" buckets. - The qualified rate looks great in a sales pitch. Most transactions land in the pricier buckets. - Least transparent. Almost always the most expensive. - Best for: nobody, really. If You're on Tiered Pricing, Switch Tiered pricing exists to make fee comparison impossible. A processor advertising a "1.69% qualified rate" can land you at a 3.5% effective rate. Most transactions get downgraded. Get an interchange-plus or flat-rate quote and compare. ### Hidden Costs Most Merchants Miss Beyond processing fees, these add up: **Chargeback fees:** these vary far more than people expect, and the difference compounds. Published per-dispute costs, verified 2026-08-02. **Helcim** charges $0 if the case resolves in your favour and $15 if you lose. **Stripe** charges $15 to receive the dispute, and you never get that back. Countering costs another $15, refunded only on an outright win. A partial win still costs you $30. **Braintree** charges $15. **PayPal** charges $15 on PayPal-account and Guest Checkout disputes, or $20 on card chargebacks. The two never both apply to one dispute. **Square** charges **$0** and says so outright. Five chargebacks a month at a $100 average ticket costs you $500 in lost sales. On top of that: $75 on Stripe or Braintree, $75 to $100 on PayPal, nothing at all on Square. One PayPal number is worth watching. Cross a 1.5% dispute ratio with more than 100 sales in the prior three months and the $15 becomes **$30**. PayPal also stops waiving it on disputes you win. **Refund processing fees:** check your provider's terms. On the stated Square Free card-present rate, a $100 sale costs $100 x 2.6% + $0.15 = **$2.75**. Check which fees are retained when that sale is refunded. **Non-compliance fees:** PCI non-compliance fees are pure waste. Fill out the questionnaire and they go away. Some processors never charge a PCI fee at all. Helcim states plainly that it has no setup, PCI, cancellation or statement fees. **Reserve holds:** some processors hold back a share of your deposits. Ask for the percentage, balance and release conditions in writing, then use those terms in your cash forecast. **Currency conversion:** international transactions often carry a 1% markup on top of the exchange rate. ### Your First Cost Audit Do this right now. It takes 15 minutes: ```text 1. Pull last month's processor statement 2. Find total fees charged: $_____ 3. Find total volume processed: $_____ 4. Calculate effective rate: fees ÷ volume × 100 = ____% 5. Price your own sales mix under your agreement: □ Separate in-person, online and keyed sales □ Include fixed fees and monthly charges □ Compare competing quotes on that same mix 6. For any unexplained difference, identify: □ Any junk fees (PCI non-compliance, statement fee)? □ Are you on tiered pricing? □ Has the rate been creeping up month-over-month? ``` ### How Much Could You Save? Published numbers, not a round guess. The comparison is Square's Free plan **card present** at 2.6% + 15c against Helcim's published interchange-plus bands. The ticket is **$50**. Pass-through is this site's blended card-present figure, **1.03% + $0.178**. Change the channel, the ticket or the card mix and the answer changes. Read [Cost Model Assumptions](https://paymentsandrisk.com/docs/payments/reference/cost-model-assumptions/) before you lift these into a spreadsheet. | Monthly Volume | Square Free effective | Helcim band | Helcim effective | Monthly gap | Annual | | --- | --- | --- | --- | --- | --- | | $25,000 | 2.90% | IC + 0.40% + 8c | 1.95% | $238.50 | $2,862 | | $50,000 | 2.90% | IC + 0.35% + 7c | 1.88% | $512 | $6,144 | | $100,000 | 2.90% | IC + 0.25% + 7c | 1.78% | $1,124 | $13,488 | | $250,000 | 2.90% | IC + 0.25% + 7c | 1.78% | $2,810 | $33,720 | Sources verified 2026-08-02: [squareup.com/us/en/payments/our-fees](https://squareup.com/us/en/payments/our-fees), [helcim.com/pricing](https://www.helcim.com/pricing/). The gap **widens** across these modelled volume bands because Helcim's markup steps down. At $25,000/month and a $50 ticket, the table gives $238.50/month, or $238.50 x 12 = **$2,862/year**. If you instead assume interchange of 1.80% + $0.10, keep this site's assumed 0.14% + $0.02 assessments on top. With Helcim's entry markup, that's 2.34% + $0.20: ($25,000 x 2.34%) + (500 x $0.20) = $685. Square's $725 then leaves **$40/month**, versus $238.50 on the site's blend. Compare the same fee layers and your own card mix. At Helcim's entry band and this site's blended card-present assumption, Square and Helcim cross at ($0.258 - $0.15) / (2.6% - 1.43%) = **about $9.23 per ticket**. PayPal's 2.29% + $0.09 crosses that Helcim band at ($0.258 - $0.09) / (2.29% - 1.43%) = **about $19.53**. Higher Helcim volume bands change both cutoffs; these aren't any-volume rules. Price migration against your own expected saving. See [Processor Comparison](https://paymentsandrisk.com/docs/payments/processor-comparison/). ### Next Steps [▶️ Continue: Negotiating & Comparing How to negotiate with your current processor or find a better deal.](https://paymentsandrisk.com/docs/learning-pathways/reducing-costs/negotiating-and-comparing) [📚 Go Deeper: Fee Audit Guide Detailed line-by-line fee analysis and red flag identification.](https://paymentsandrisk.com/docs/payments/processor-fees-guide)