Average Credit Card Processing Fees in 2022: The Complete Guide

When it comes to credit card processing fees, businesses have a lot to consider. These fees can vary depending on the type of business, the size of the transaction, and even the time of year. With so many factors to consider, it can be difficult to determine what’s “average.”

To help you better understand credit card processing fees, we’ve put together a comprehensive guide that covers everything from the basics of how these fees work to what you can expect to pay in 2022.

We’ll start by discussing the three main types of credit card processing fees: interchange fees, assessment fees, and processor markup fees. We’ll then provide an overview of how these fees are calculated. Finally, we’ll give you a range of what businesses are paying in credit card processing fees today and what experts expect those fees to be in 2022.

Interchange Fees

Interchange fees are the fees charged by credit card companies, such as Visa and Mastercard, for processing a transaction. These fees are typically around 1-2% of the total transaction amount and are paid to the card issuer.

Assessment Fees

Assessment fees are charged by the credit card associations (e.g., Visa, Mastercard, Discover) and are used to cover the cost of running their payment networks. These fees are typically around 0.1% of the total transaction amount.

Processor Markup Fees

Processor markup fees are the fees charged by credit card processors, such as Square or PayPal, for facilitating a transaction. These fees are typically around 2.9% + $0.30 per transaction.

Now that we’ve covered the three main types of credit card processing fees, let’s take a closer look at how they’re calculated.

Calculating Interchange Fees

Interchange fees are based on a number of factors, including the type of credit card being used, the processing network, and the merchant category code (MCC).

For most businesses, the interchange fee will be around 1-2% of the total transaction amount. However, this percentage can vary depending on the type of business and the size of the transaction.

Calculating Assessment Fees

Assessment fees are based on the cost of running the payment networks, which is why they’re typically around 0.1% of the total transaction amount. This fee is charged by both Visa and Mastercard and is used to cover the cost of their respective payment networks.

Calculating Processor Markup Fees

Processor markup fees are the fees charged by credit card processors for facilitating a transaction. These fees are typically around 2.9% + $0.30 per transaction and can vary depending on the processor and the type of transaction.

Now that we’ve covered how these fees are calculated, let’s take a look at what businesses are currently paying in credit card processing fees.

What Businesses Are Paying in Credit Card Processing Fees?

According to a recent study by the National Small Business Association (NSBA), the average small business pays around 3.5% in credit card processing fees. This percentage can vary depending on the type of business, the size of the transaction, and the processor used.

What Experts Expect Credit Card Processing Fees to Be in 2022?

According to a recent study by Forrester, experts expect credit card processing fees to increase by around 20% over the next three years. This increase is due to a number of factors, including the growing popularity of EMV chip cards and the increasing use of mobile payments.

While the exact percentage will vary depending on the business, experts expect the average small business to pay around 4.2% in credit card processing fees by 2022.

Conclusion

Credit card processing fees can be difficult to understand and even more difficult to predict. However, by understanding the three main types of fees and how they’re calculated, you can get a better understanding of what you’re paying and what to expect in the future.

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