Why am I being charged a processing fee?

While no merchant is a huge fan of credit card processing fees, they do play a fundamental role in the payment process. The fees are used to pay for the infrastructure and technology that allows funds and transaction data to be processed and transmitted from one party to the next in the transaction process.

Are processing fees legal?

Yes. Credit card processing is a service. Like all services, fees exist to cover the costs associated with facilitating that service.

Who pays processing fees?

Merchants are the primary party responsible for paying processing fees.

How do I get rid of processing fees?

You canât âget rid ofâ processing fees. However, you <em>can </em>limit your processing fees by decreasing your exposure to fraud and chargebacks, shopping around for the best payment processor in your transaction tier, and limiting the number of small-dollar transactions you run each day.

What is the typical fee for credit card processing?

Credit card processing fees typically range from 1% to 3% of the transaction amount. Exact costs depend on the card brand, setting of the transaction, and payment processor you use.

How do I pass on the credit card processing fee to the customer?

In some jurisdictions, you may charge buyers a credit card processing surcharge at checkout. Federal law caps credit card surcharges at 4%, but some states may impose lower caps or even ban surcharges entirely.

Is it illegal to charge a credit card processing fee to customers?

It depends on your jurisdiction. Credit card processing fees are entirely prohibited in four states: Maine, Massachusetts, Connecticut, and California. Other states, like New York, New Jersey, South Dakota, and Nevada, allow merchants to charge buyers the actual processing fee incurred by the merchant. Still others, like Colorado, limit credit card processing fee surcharges to 2%, which is half the federal limit of 4%.

What is a fair credit card processing fee?

A fair credit card processing fee will depend on several factors. These include your risk level as a merchant, the type of cards you accept, and whether you accept in-person or online payments. In general, you can expect credit card processing fees to cost between 1% and 3% of the transaction amount.