Hand taps credit card against pay terminal in clothing store.

What are Credit Card Processing Fees?

4 min read

Last Updated: April 16, 2025

Table of contents

Key Takeaways

Merchants pay processing fees to companies that enable the credit card sales transactions.
Retailers sometimes pass on processing fees to customers in the form of a credit card convenience fee.
Some states don’t allow retailers to charge you a fee for using a credit card.

Credit cards can make payments easier and more convenient. In exchange for this convenience, merchants pay a credit card processing fee (sometimes called a transaction fee or swipe fee) on every charge. Merchants also incur a swipe fee when you use a debit card, but credit card transactions cost more to process.

Credit card processing fees are a part of business costs. However, some businesses offset these fees through surcharges on credit card purchases.

What is a credit card processing fee?

A credit card processing fee is a charge all businesses pay whenever they accept a credit card payment. The credit card processing fee is further broken down into payments made to different providers who make the transactions happen.

Interchange fee/rate: This is the largest element of credit card processing fees and goes to credit card issuers, like Discover^® Card. An interchange fee is usually a small percentage of the transaction plus a flat rate.
Assessment fee: An assessment fee is a smaller fee sent directly to credit card networks for operational services. Discover is an example of a credit card network (Discover is both a credit card issuer and card network) but other examples are Visa^® and Mastercard^®.
Payment processor fee: This fee goes to the companies that manage card payments through payment processing software or hardware.

Who pays for credit card processing fees?

The question of who pays for processing fees depends on a few factors, including where you live.

Businesses that accept credit card payments pay credit card processing fees. However, some merchants offset these fees by adding a surcharge on all credit card transactions. Other merchants may pass the cost on to customers by raising the prices of the goods or services they sell.

Still, some states don’t allow merchants to add a surcharge.

As a consumer, you don’t pay processing fees in a direct way. However, high processing fees may increase the cost of the things you buy. If you have a cash back credit card, you could earn more rewards if you’re spending more.

Learn More

Surcharges and convenience fees

Credit card processing fees can add up quickly and eat into a company’s profits. Some retailers choose to counteract processing fees by adding a small convenience fee when you use a credit card.

Credit card processing fees shouldn’t be confused with other types of credit card fees credit card users may pay, which include annual fees, late payment fees, and over-limit fees. A credit card company may charge a late payment fee if you miss your payment due date or an over-limit fee when you exceed your credit limit. Some card issuers charge card users an annual fee for using a credit card.

Did you know?

Many credit cards charge annual fees, especially when they offer rewards. But Discover has no annual fee on any of our cards. Plus, we’ll automatically match all the cash back you’ve earned on your credit card at the end of your first year. There is no limit to how much we’ll match.¹

Learn More

How credit card processing fees work

Credit card processing fees depend on the credit card payment processor and the pricing structure they use. Each has its own way of calculating the processing fee for a business. For example, one pricing structure may charge a certain percentage or flat fee on every credit card transaction, while another may determine the processing fee based on the type of card used.

How much are credit card processing fees?

When it comes to credit card processing fees, there’s no set amount. Fees depend on the credit card issuer, payment processor, and payment network. Another contributing factor is which issuers the merchant accepts payments from. Network and processor fees vary by provider and may affect the merchant’s profits.

The bottom line

Credit card processing fees impact both vendors and customers, but most merchants account for them when setting prices. If you shop in a state that doesn’t allow credit card surcharges, you may be able to dispute a credit card surcharge that a merchant adds to your bill.

Important Information >

See if you’re Pre-approved before you apply

Check Now

Next steps

See if you're pre-approved

Check Now

Learn about Discover It^® Cash Back Credit Card

See rates, rewards and other info

Learn More