Payment gateway fees are not one number—they stack
A payment gateway charges you multiple fees at once, and they vary by processor, card type, and transaction size. Most gateways charge a percentage of each transaction (usually 2.2% to 3.5%), a flat per-transaction fee (typically $0.30), or both. Some add monthly account fees, batch fees, or PCI compliance charges. A $100 credit card sale might cost you $3.30 in fees; a $10 sale might cost $0.60. The total percentage you pay shrinks as transaction size grows, but the math stays the same: gateway + processor + card network + bank all take a cut.
What you actually pay depends on which processor you use, whether the card is present or not, and whether the customer is using a debit card, credit card, or digital wallet. Interchange rates—the fee the card-issuing bank charges—are set by Visa and Mastercard and do not change based on your processor, but everything else does. Two businesses processing the same $100 transaction can pay different total fees if they use different gateways or have negotiated different rates.
Key Takeaways
- Most payment gateways charge a percentage fee (2.2% to 3.5%) plus a flat per-transaction fee ($0.30 or more), and these stack on every sale.
- Interchange rates set by Visa and Mastercard are the same everywhere, but processor markups and gateway fees vary by provider and your business volume.
- Card-present transactions (in-person, with a physical card reader) usually cost less than card-not-present transactions (online, phone, mail).
- Monthly fees, batch fees, PCI compliance charges, and chargeback fees add to your total cost and are often hidden in the fine print.
- Comparing gateways requires looking at the full fee structure, not just the advertised percentage, because a lower headline rate can hide higher flat fees or monthly charges.
The three layers of payment gateway fees
Every transaction passes through three separate entities, and each takes a fee. The card network (Visa, Mastercard, American Express, Discover) charges an assessment fee—typically 0.11% of the transaction. The card-issuing bank charges interchange, which is the largest piece and ranges from 1.5% to 3% depending on card type and whether the card is physically present. The payment processor (your gateway provider) charges a markup on top of interchange, plus a flat per-transaction fee.
A $100 credit card transaction might break down like this: interchange of $2.00, network assessment of $0.11, processor markup of $0.80, and flat fee of $0.30, totaling $3.21. But if the same transaction happens over the phone instead of in person, interchange might jump to $2.50, pushing the total to $3.71. If the customer uses American Express instead of Visa, interchange can be 2.5% to 3.5%, and the total fee jumps again.
You cannot negotiate interchange or network fees—those are set by the card networks and banks. You can only negotiate the processor's markup and flat fee, and only if you have volume or are willing to switch providers.
How transaction type changes what you pay
Card-present transactions (customer hands you a card, you swipe or insert it, or they tap a contactless reader) may have access to for the lowest interchange rates because fraud risk is lowest. These typically cost 1.5% to 2.2% interchange plus processor fees.
Card-not-present transactions (online checkout, phone order, mail order) carry higher fraud risk and cost more. Interchange for these typically runs 2.2% to 3.5%. If you do not collect an address verification or CVV, the rate climbs higher because the card network sees you as higher risk.
Digital wallets (Apple Pay, Google Pay, PayPal) sometimes cost less than traditional card processing because the wallet provider handles tokenization and reduces fraud risk. Some gateways charge the same rate for wallets as for card-present transactions.
ACH transfers (bank-to-bank) typically cost $0.25 to $1.50 per transaction, flat, with no percentage. They are slower (3 to 5 business days) but much cheaper for large amounts. A $5,000 ACH transfer costs $1.50; the same amount by credit card costs $150 to $175.
Monthly and hidden fees that add up
Beyond per-transaction fees, gateways charge account maintenance fees, batch settlement fees, PCI compliance fees, and chargeback fees. A typical breakdown:
| Fee Type | Typical Cost | When You Pay It |
|---|---|---|
| Monthly account fee | $0 to $30 | Every month, whether you process transactions or not |
| Batch settlement fee | $0.25 per batch | Each time you settle transactions (daily or weekly) |
| PCI compliance fee | $10 to $50 per month | Monthly, if you store card data |
| Chargeback fee | $15 to $100 per dispute | When a customer disputes a charge |
| Gateway setup fee | $0 to $500 | One-time, when you open the account |
| Early termination fee | $0 to $300 | If you close the account before contract end |
A business processing $50,000 per month might pay $1,500 to $1,800 in transaction fees, plus $30 to $50 in monthly fees, plus $10 to $50 in PCI fees, plus occasional chargeback fees. That is 3.6% to 4.3% of revenue, not the 2.9% the gateway advertised.
Some gateways bundle these fees into a single rate; others itemize them. Read the pricing page and the contract carefully. If the gateway does not list a monthly fee, ask whether batch settlement fees or PCI fees apply. If they say "no hidden fees," ask specifically about chargeback fees and early termination fees.
How volume and business type affect your rate
Gateways negotiate rates based on your monthly processing volume and your industry. A restaurant processing $200,000 per month might negotiate a rate of 2.5% plus $0.25 per transaction. The same restaurant processing $20,000 per month might pay 2.9% plus $0.30. A high-risk business (online gambling, adult services, travel) pays more because chargebacks are more common.
If you are just starting out, you will pay the standard published rate. As you grow, you can request a rate review or shop competing gateways. Stripe, Square, PayPal, Authorize.net, and Shopify Payments all publish rates, but each has different fee structures. Stripe charges 2.2% plus $0.30 for online transactions; Square charges 2.6% plus $0.30 for online and 2.6% plus $0.10 for in-person; PayPal charges 2.2% plus $0.30 for online. The difference on $100,000 per month is $200 to $400.
Comparing gateways: what to actually look at
Do not compare gateways on headline rate alone. Create a spreadsheet with your actual transaction mix: what percentage are card-present, card-not-present, ACH, and digital wallet. Plug in the fees for each gateway and calculate your total monthly cost on your actual volume.
Include monthly fees, batch fees, and PCI fees in the calculation. Ask each gateway whether they charge for chargebacks, early termination, or gateway setup. Ask whether rates change if you process more than a certain amount per month. Ask whether they offer volume discounts or whether you can negotiate.
For most small businesses, the difference between gateways is $50 to $200 per month. For high-volume businesses, it can be thousands. The effort to compare is worth it if you process more than $10,000 per month; below that, pick a gateway with no monthly fee and move on.
What happens to fees if a transaction fails or is disputed
If a transaction is declined (insufficient funds, fraud block, expired card), you do not pay the transaction fee. You may pay a gateway fee for the attempt, but most gateways do not charge for declined transactions.
If a customer disputes a charge (chargeback), you pay a chargeback fee ($15 to $100) plus you lose the transaction amount. If you lose the dispute, you also lose the product or service you provided. Chargebacks are the most expensive transaction outcome.
If a transaction is refunded, you pay the transaction fee but the processor refunds the interchange and network fees. So a $100 refund costs you the $0.30 flat fee but not the percentage portion.
Frequently Asked Questions
Can I negotiate my payment gateway fees?
Yes, if you process at least $10,000 per month and are willing to switch providers. Contact your current gateway and tell them you have competing offers; many will match or beat a competitor's rate. If you process less than $10,000 per month, negotiation is unlikely to work, and the effort is not worth the savings.
Why does my gateway charge different fees for different card types?
Visa, Mastercard, American Express, and Discover set different interchange rates based on card type (credit, debit, rewards) and whether the card is physically present. Your gateway passes these rates through and adds its own markup. You cannot change the interchange, but you can choose a gateway with a lower markup.
What is the cheapest way to accept payments?
ACH transfers cost the least per transaction ($0.25 to $1.50 flat), but they are slow (3 to 5 days). Credit cards cost more but settle in 1 to 2 days. If you can wait for payment, ACH is cheapest. If you need money fast, credit card is the trade-off.
Do I have to pay gateway fees on refunds?
You pay the flat per-transaction fee ($0.30 or so) but not the percentage fee. The processor refunds the percentage portion to you. So a $100 refund costs you about $0.30, not $3.00.
What is PCI compliance and why does it cost money?
PCI (Payment Card Industry) compliance is a security standard that protects card data. If you store card information, you must be PCI compliant, and gateways charge $10 to $50 per month for this service. If you do not store card data (most gateways handle that for you), you do not pay this fee.