Card Payments

TL;DR

Credit cards cost 2.5-3.5% (interchange + assessments + processor markup)
Debit cards are cheaper: regulated banks capped at 0.05% + $0.21 (Durbin Amendment)
Prepaid is low risk for merchants (funds pre-loaded) but high compliance burden for issuers
Friendly fraud (legitimate cardholder disputes valid purchase) is the majority of chargebacks for most merchants
Submit Level 2 data on commercial cards and interchange drops 0.75 points, from 2.65% to 1.90%. Both networks publish it

Card payments are still the dominant method in the US, moving trillions of dollars a year. But "cards" isn't one product. It's several, and the economics are not the same.

Credit Cards

Pay with credit and the issuing bank is lending the money. You get paid now. The cardholder pays the bank later, and that's the bank's risk, not yours.

How the money flows:

Cardholder swipes/taps/enters card
Authorization request goes: Merchant → Processor → Network → Issuer
Issuer approves and places hold on credit line
At settlement, issuer funds the transaction to the network
Network settles with acquirer, minus fees
Acquirer deposits to merchant account

Why Credit Cards Are Expensive

The issuer is taking real risk. They pay you today, and they might not collect from the cardholder for 30-60 days. Or ever, if the cardholder defaults. Interchange compensates for:

Credit risk (cardholders might not pay)
Fraud risk (the transaction might be disputed)
Float (the issuer fronts the money)
Rewards funding (those 2% cash back points come from somewhere)

Note: numbers below are representative US values as of 2024-2025. They will change. Always consult current network rate tables for precise pricing.

Typical Credit Card Interchange

Card Type	Card-Present	Card-Not-Present
Consumer credit, no rewards	1.51% + $0.10	1.89% + $0.10
Standard rewards	1.65% + $0.10	2.05% + $0.10
Premium rewards (Signature Preferred)	2.10% + $0.10	2.50% + $0.10
Top consumer tier (Visa Infinite, MC World Elite)	2.30% + $0.10	2.60% + $0.10
Commercial / business	2.26% + $0.10	2.79% + $0.10
Non-qualified (failed qualification)	3.15% + $0.10	3.15% + $0.10

Visa USA Interchange Reimbursement Fees, effective 18 April 2026. Cross-checked against Mastercard 2026-2027 U.S. Region Interchange Programs and Rates, effective 17 April 2026. Commercial is a blend of Business Product 2 and Commercial Card Present. Corporate and purchasing cards run to 3.00% + $0.10. Both verified 2 August 2026.

The two networks agree at the bounds. Top consumer tier on both is 2.30% + $0.10 in person, 2.60% + $0.10 online. Non-qualified is 3.15% + $0.10 on both. Neither schedule contains a 3.5% rate anywhere.

On top of interchange you pay network assessments, which neither network publishes. This site estimates them at 0.14% + $0.02 and labels that unverified. See how we model processing cost for the full build-up and the card mix behind it.

These are single card types, not a blend. Blended across a real card mix, your rate is much lower than any rewards-credit row above. Debit is the majority of transactions by count, and it drags the average down hard. Most merchants who overestimate interchange take a rewards-credit rate as their average. It's usually off by a lot.

What the markup actually is, where it's published. Most processors bundle interchange into one flat rate and never show you the split. Two publish the markup in full, which makes them the yardstick for any quote:

Processor	Published markup over interchange	Monthly	Source, verified 2026-08-02
Helcim	+0.40% + 8c in person, +0.50% + 25c online at the entry band, falling to +0.15% at $1M-5M/month	$0	helcim.com/pricing
Stax	0% markup, 8c in person and 15c online	$99-$199+, set by annual volume	staxpayments.com/pricing
Adyen	Not published. Interchange++ plus a $0.13 processing fee, indicative card markup 0.60%	No monthly fee, but an unquantified "minimum invoice"	adyen.com/pricing

Flat-rate processors publish the all-in number instead. Square is 2.6% + 15c in person on the Free plan, 3.3% + 30c online. Braintree is 2.89% + $0.29 online. PayPal Checkout is 3.49% + $0.49. Which model is cheaper depends on the cards your customers actually use, not on how much you're doing. See the card-mix test.

Stax is the one to watch on that math. A 0% markup sounds unbeatable. But the $99-$199+ monthly fee is fixed, and the markup you'd pay at Helcim scales with your volume. Small merchants pay the fee and never earn it back. Both charge 8c in person, so the real comparison is Helcim's +0.40% against Stax's monthly fee. Run it at your volume, and only take Stax if the markup wins.

Card-Not-Present Fraud and Friendly Fraud

CNP transactions (online, phone, mail order) run significantly higher fraud rates than card-present. But not all "fraud" is stolen credentials:

Third-party fraud: Stolen card numbers used without cardholder knowledge (the classic fraud scenario)
Friendly fraud / first-party misuse: Cardholder makes a legitimate purchase, then disputes it claiming "I didn't make this purchase" or "I didn't receive it." This is a major component of card chargebacks, especially in digital goods, subscriptions, and services where there's no physical delivery proof.

For most e-commerce merchants, friendly fraud is the majority of chargebacks. It isn't always intentional, and "buyer's remorse" or "forgot I signed up" are real. But the economics hit you the same way. Stop sorting disputes by intent. Sort them by cause.

Debit Cards

Debit is fundamentally different from credit. The money comes directly from the cardholder's bank account. No loan, no credit risk.

Two Flavors of Debit

PIN Debit: Customer enters PIN. Transaction routes over debit networks (STAR, NYCE, Pulse, etc.). Generally lowest cost.

Signature Debit: Customer signs (or doesn't, for small transactions). Routes over Visa/Mastercard networks. Slightly higher cost than PIN, but still cheaper than credit.

The Durbin Amendment Effect

Banks over $10 billion in assets have their debit interchange capped by federal regulation:

Regulated rate: 0.05% + $0.21 (plus up to $0.01 for fraud prevention)

For smaller banks, debit rates are unregulated and higher:

Exempt rate: Typically 0.80% + $0.15 for signature debit

That creates a quirk: a debit card from a small credit union costs you more than one from Chase or Bank of America. It isn't intuitive, and there's nothing you can do about it.

Why Debit Is Cheaper

No credit risk (money is already in the account)
Lower fraud rates (PIN verification, real-time account access)
Lower dispute rates (harder to claim "I didn't authorize this" when your PIN was used)
No rewards to fund (most debit cards don't offer significant rewards)

Canadian Debit: Interac

Canadian debit cards process through the Interac network in store, with Visa Debit and Mastercard Debit cards alongside them. Those can route through either Interac or the card network. Credit cards are still the most popular method in Canada overall, same as the US.

Why Interac matters for Canadian merchants:

Factor	US Debit	Canadian Interac Debit
Network	Visa/Mastercard debit (with PIN networks like STAR, Pulse)	Interac
Pricing	Percentage-based (regulated: 0.05% + $0.21)	Flat fee per transaction, set by your processor
Cost on a $100 sale	$0.26 (regulated) to $0.95 (unregulated)	CA$0.09 in person on Helcim, CA$0.12 for tap. CA$0.12 in person on Moneris, but CA$1.00 card-not-present
Regulation	Durbin Amendment (banks over $10B)	Voluntary Interac fee schedule
Contactless	Visa/MC contactless	Interac Flash (tap)

Interac pricing verified against Helcim's and Moneris's own pricing pages on 2026-08-02.

For a Canadian merchant with real in-person debit volume, this isn't close. Interac's flat fee is about 9 to 12 Canadian cents, against CA$2.75 on a $100 credit sale at Moneris's published 2.65% + $0.10. Put the debit prompt first at the terminal and let customers take it.

Online is a different story. Moneris publishes Interac Debit card-not-present at CA$1.00 per transaction. That's more than eight times its in-person fee. On a CA$25 online order it's 4% before anything else. Got a low average online ticket? Check what your processor charges for online Interac specifically. The in-person number tells you nothing about it. On a small enough online ticket, a percentage credit rate can land cheaper than a flat CA$1.00, so run both against your own average order value.

Many Canadian debit cards also carry Visa Debit or Mastercard Debit branding. Online, those transactions often route through Visa/MC networks rather than Interac.

Interac e-Transfer is Canada's dominant bank-to-bank transfer system. It handles P2P payments, invoice payments, and business transfers. It's what ACH is in the US, but with near-instant settlement. See Bank Transfers for details.

Processors with strong Canadian support: Moneris, Helcim, Square (Canada), Stripe (Canada). Helcim publishes Interac and EFT-PAD pricing openly.

One Canadian fee is worth knowing before you sign: Moneris charges CA$25 per chargeback. Then a separate CA$80 "Authorization Chargeback Handling" fee (source, verified 2026-08-02). That's unusual, and it doesn't appear on any other processor checked. Get it struck or discounted in writing before you sign, not after your first dispute.

Prepaid Cards

Prepaid cards are funded in advance. No credit line, no bank account required. But "prepaid" covers several products with very different risk profiles.

Types of Prepaid

Closed-loop gift cards (Starbucks, retailer gift cards) only work at the issuing merchant. There's no network dispute, so your policy decides. Breakage (unused balances that expire or go forgotten) is real margin.

Open-loop general purpose reloadable (GPR): Visa/Mastercard branded, works anywhere. Functions like a debit card. Network disputes exist, but chargeback rates run lower than credit cards.

Payroll and government disbursement cards: used for direct deposit. The recipients are unbanked or underbanked. Low fraud and chargebacks, but heavy compliance requirements for issuers.

Corporate prepaid/expense cards: Used for employee expenses, travel. Similar to commercial cards but prefunded.

Risk by Perspective (This Is Important)

Prepaid risk looks completely different depending on where you sit:

For merchants:

Chargeback rates are typically lower than credit cards (often lower than debit too)
"I didn't authorize this" disputes are rare once funds are loaded and spent
Fraud tends to concentrate at load and cash-out points, not retail spend
Bottom line: Prepaid is usually lower risk for merchants than credit

For issuers/program managers:

High risk across three types: fake identities and fake KYC, plus mule accounts, which are second party rather than first
Exposure on load channels (card-to-card loads, ACH loads that return)
Higher operational burden: KYC verification, ongoing monitoring
Bottom line: Prepaid programs require significant fraud and compliance infrastructure

For AML/compliance teams:

Open-loop GPR is a regulatory focus area
Easy to buy with cash, can be layered and moved between accounts
Historically used in money-mule chains and smurfing patterns
Heavy KYC, load limits, and transaction monitoring requirements
Bottom line: High AML/CTF scrutiny regardless of actual fraud rates

The Merchant Takeaway

If you see prepaid transactions, don't automatically treat them as high-risk. On chargebacks they're often safer than credit cards. The fraud concerns around prepaid are real, but they're mostly issuer-side and compliance-side problems, not yours. Your risk goes up in one place: cash-out verticals like crypto, gambling, remittance, and peer-to-peer marketplaces, where prepaid might be part of a money movement scheme. Everywhere else, blocking prepaid BINs costs you good customers and buys you nothing.

Commercial Cards

Business, corporate, and purchasing cards have their own interchange categories, which usually run higher than consumer cards.

Why higher?

Larger average transaction sizes
Often card-not-present (phone/online orders)
Additional features (expense reporting, spending controls)
Different fraud patterns

The Level 2/3 Data Opportunity

If you process real B2B volume, submit enhanced transaction data. It cuts interchange. The Settlement guide has the full write-up. Short version:

Data Level	Additional Fields	Potential Savings
Level 1 (Standard)	Basic transaction info	Baseline
Level 2	Tax amount, customer code, merchant tax ID	0.75 points, small business credit
Level 3	Line-item detail, freight, duty	0.80-0.95 points, corporate and purchasing cards only

Take a business doing $500K/year in B2B transactions. Proper Level 2/3 data submission could save $2,500-$4,000 annually. If you sell to businesses at all, this is the first thing to fix.

Network Differences

Visa and Mastercard are four-party networks: cardholder, issuer, acquirer, merchant. They don't issue cards. They operate the rails.

American Express and Discover are three-party networks. They issue their own cards and they run the network. That's more control for them and, historically, higher fees for you.

Practical Differences

Network	US Market Share	Typical Interchange	Notes
Visa	~53%	Varies by category	Largest network, most complex rate structure
Mastercard	~26%	Varies by category	Very similar to Visa
American Express	~10%	2.0-3.5%	Higher rates, but the OptBlue program offers lower rates for small merchants
Discover	~3%	Similar to Visa/MC	Often slightly lower than comparable Visa/MC rates

Should You Accept Amex?

Yes. The old advice was "Amex is too expensive," and it's outdated for most merchants. Amex's OptBlue program covers merchants under $1M in Amex volume. Its rates compete with premium Visa/MC cards. The customers who carry Amex tend to spend more. Refusing Amex usually costs more in lost sales than it saves in fees.

There is no single published OptBlue rate. OptBlue is sold through acquirers. Each one sets its own rate inside Amex's wholesale structure. Your rate depends on who signs you up, not on Amex. So ask your acquirer for the OptBlue rate in writing, and get the Visa and Mastercard rates the same way. Compare all three on one statement. Flat-rate processors usually fold Amex into their headline Visa/Mastercard rate. Confirm that rather than assume it.

Next Steps

Understanding card costs?

Review credit vs debit economics - Why credit costs more
Learn the Durbin effect - Regulated vs exempt debit
Check Level 2/3 opportunity - B2B savings

Optimizing card acceptance?

Evaluate Amex acceptance - OptBlue may be worth it
Consider payment method routing - Lower-cost options for B2B
Review auth optimization - Improve approval rates

Understanding card risk?

Know prepaid risk by perspective - Merchant vs issuer view
Understand friendly fraud - the majority of chargebacks
Review chargeback prevention - Reduce disputes

Credit Cards​

Why Credit Cards Are Expensive​

Typical Credit Card Interchange​

Card-Not-Present Fraud and Friendly Fraud​

Debit Cards​

Two Flavors of Debit​

The Durbin Amendment Effect​

Why Debit Is Cheaper​

Canadian Debit: Interac​

Prepaid Cards​

Types of Prepaid​

Risk by Perspective (This Is Important)​

The Merchant Takeaway​

Commercial Cards​

The Level 2/3 Data Opportunity​

Network Differences​

Practical Differences​

Should You Accept Amex?​

Next Steps​

See Also​