Credit card processing fees: interchange, network fees and markup

Knowing what goes into each card fee helps you answer your customers’ questions and compare provider offers on equal terms, whatever pricing model an offer uses.

Credit card processing fees explained: the three layers

The card networks set the first two layers. Only the third, the markup, is set by the provider your customer signs with.

Interchange. A fee set by the card network and paid between banks: the acquirer pays it to the card issuer, the bank that issued the card. Visa’s US interchange schedule says merchants do not pay interchange. They pay a merchant discount to their own bank, and that rate bundles interchange together with other fees.

Network fees. The card networks also charge assessments to acquirers, which usually pass them through to merchants, along with smaller per-item network fees. Visa does not publish its acquirer service fees. Processors commonly list them at roughly 0.13% to 0.14%, and trade press reported that Mastercard’s Acquirer Brand Volume fee rose from 0.13% to 0.14% on credit, debit and prepaid cards, effective April 15, 2024. These figures come from secondary sources, so confirm current network fees with the acquirer.

Provider markup. The rest is what the processor or payment provider charges for its own services, as a percentage, a per-transaction fee or both. How visible it is depends on the pricing model, covered below.

On a statement, the three layers may appear line by line or as one blended rate. A blended rate still contains all three. It just doesn’t show where one ends and the next begins.

Why rates differ from one payment to the next

Two card payments of the same amount can carry very different interchange fees. The card product, the merchant’s segment and whether the payment qualifies for a given rate all play a part. So does the channel. Card-not-present payments, such as a payment made on a website or inside an app, carry more fraud risk than card-present ones, and they carry higher interchange too.

Visa’s published US interchange schedule, effective April 18, 2026, shows the gap for exempt debit cards (cards from issuers outside the Regulation II cap, explained in the next section).

Those are Visa’s dated rates for one card category. Other card products, other networks and other merchant segments have their own rates, and the schedules change, so check the current schedule instead of relying on these numbers. If your customers take payments online or inside your software, the card-not-present rates are the ones to look at.

Debit cards and the Regulation II debit cap

Debit cards follow a different rule. Regulation II, the Federal Reserve rule that implements the Durbin Amendment’s debit cap, limits the interchange that large debit issuers can receive. As of October 2026, the cap is 21 cents + 0.05% of the transaction, plus a 1-cent fraud-prevention adjustment for issuers that certify they meet the Fed’s fraud-prevention standards. On a $50 payment, that is a maximum of 24.5 cents.

The cap applies to debit issuers that, together with their affiliates, have $10 billion or more in assets, and it covers general-use prepaid cards as well. It has not changed since October 1, 2011. Visa’s April 2026 schedule still lists regulated debit and prepaid at 0.05% + $0.21. Cards from smaller issuers are exempt, which is why the schedule also carries the separate exempt debit rates shown above.

A lower cap has been proposed, not adopted. On October 25, 2023, the Fed proposed lowering the cap to 14.4 cents + 0.04% + a 1.3-cent fraud-prevention adjustment, recalculated every other year. The Fed said that would cut the maximum fee on a $50 transaction from 24.5 cents to 17.7 cents. The comment period was extended to May 12, 2024. As of October 2026, the Fed has neither finalized nor withdrawn the proposal.

The rule is in court. In the Corner Post case, a federal court in North Dakota vacated Regulation II on August 6, 2025, but stayed its own order pending appeal. A federal court in Kentucky upheld the rule on September 15, 2025. The Eighth Circuit heard argument in May 2026, and as of October 2026 no ruling has been reported. Because of the stay, the current cap still applies.

Two networks for every debit payment. Since July 1, 2023, Regulation II has made clear that debit issuers must enable at least two unaffiliated networks for all debit transactions, including card-not-present ones. That lets merchants and acquirers route online debit payments over more than one network.

Card pricing models

The three layers reach your customers through a pricing model. The same underlying costs can look very different on a statement depending on which model a provider uses. Four are common: interchange-plus pricing, flat-rate, tiered and subscription.

Which model costs least depends on ticket size, card mix and volume. When you or your customers compare offers, work out what a realistic month of their payments would cost under each model, not just the headline rate.

ACH bank payments are priced differently from cards. For what goes into the cost of a bank payment, including returns, see our guide to ACH processing fees.

Passing card costs on to payers

Your customers may ask whether they can pass card costs on to the people who pay them. Federal law, the card networks and the states each set credit card surcharge rules, and those rules differ.

Federal law protects discounts, not surcharges. The Electronic Fund Transfer Act, as amended by the Dodd-Frank Act (15 U.S.C. 1693o-2), bars card networks from preventing merchants from offering a discount for paying by cash, check, debit or credit. The discount must not differ by issuer or network, and it must be disclosed. The same section lets merchants set a minimum of up to $10 for credit card purchases. It does not create a right to surcharge.

Visa’s surcharge rules. In the US, Visa allows surcharges on credit cards only. The surcharge must not exceed the lesser of the merchant discount rate for that card or 3%. Visa lowered its cap from 4% to 3% effective April 15, 2023. The merchant must notify its acquirer at least 30 days before it starts, and must disclose the surcharge at the point of entry, at the point of sale and on every receipt. It can surcharge at the brand level (all Visa credit cards) or the product level, but not both, and each merchant location follows the law of the state it is in.

Debit and prepaid cards cannot be surcharged. That is a Visa rule in the US, and it holds even when a debit cardholder chooses “credit” at the terminal, because that choice only selects signature rather than PIN processing. The ban comes from network rules and some state laws, such as Colorado’s, not from a federal statute.

Mastercard’s cap. A November 2025 law-firm analysis, a secondary source, puts Mastercard’s current US surcharge cap at 4%. Mastercard is also reported to limit a surcharge to the merchant’s cost of acceptance. Neither point is taken from Mastercard’s published rules, so confirm the current cap with your acquirer.

Surcharges, convenience fees and cash discounts

These three programs are easy to confuse, and Visa’s rules and federal law treat them differently as of October 2026.

• Surcharge: an amount added to a credit card payment at checkout, within Visa’s cap, notice and disclosure rules above. Never on debit or prepaid cards.
• Convenience fee: under the Visa Core Rules (April 18, 2026), a flat or fixed amount for paying through a bona fide alternative channel outside the merchant’s customary ones, on card-absent payments only. Only the merchant providing the goods or services may charge it.
• Convenience fee conditions: it must apply to all payment forms in that channel, be disclosed before the payment is completed with a chance to cancel, and be included in the transaction total. It cannot be combined with a surcharge or charged on recurring or installment payments.
• Cash discount: a lower price for paying another way, protected by federal law. Visa allows a discount program only when prices show the card price alone, or the card and cash prices side by side. A card total built by adding a fee at checkout may be treated as a surcharge.

One consequence for your customers: if a business takes all of its card payments card-absent, for example only online, Visa’s rules do not allow it a convenience fee at all, because the fee is reserved for an alternative channel.

State law adds another layer. As of October 2026, these are the main state rules to know.

If your customers send invoices, our page on card and ACH payments for B2B invoicing software covers what to check before they pass card fees to the businesses they bill.

Surcharge, discount and fee rules change often, and they depend on where each business is located. Before your customers add any fee to a card payment, they should verify the current rules with counsel and with their payment provider.

The pending Visa and Mastercard settlement

A proposed settlement of a merchant class action against Visa and Mastercard is still before the court. In that case (US District Court for the Eastern District of New York, docket 05-md-1720), an amended class settlement received preliminary approval on June 9, 2026. The court has set the final approval hearing for November 16, 2026.

The settlement is not final and not in effect. A joint objection by 978 merchants and merchant trade associations was docketed on September 10, 2026, and large retailers and trade groups filed further objections on September 14, 2026. If the settlement is approved, it could change the surcharge rules for both networks. Until then, the current network rules described above apply.

The Illinois Interchange Fee Prohibition Act

Illinois’ Interchange Fee Prohibition Act (IFPA) would bar interchange on the sales-tax and tip portions of card transactions. As of October 2026, it has been pushed back to July 1, 2027, its second delay. In June 2026, a federal court also permanently enjoined it for national banks, federal savings associations, out-of-state state-chartered banks and the card networks. Illinois-chartered banks remain subject to it.

If your customers add tips or itemize sales tax in your software, keep an eye on this law.

This guide is general information as of October 2026, not legal advice, as our website terms and conditions explain. For short definitions of the terms used here, start with interchange in our payments glossary.

Sources

1. Visa, US interchange reimbursement fees
2. Board of Governors of the Federal Reserve System, Regulation II (debit card interchange)
3. Federal Reserve, Proposal to lower the debit interchange cap (October 25, 2023)
4. Federal Register, Debit card interchange fees and routing (proposed rule)
5. Federal Reserve, Card-not-present debit routing rule (October 3, 2022)
6. Legal Information Institute, 15 U.S.C. 1693o-2
7. Visa, Merchant surcharging Q&A
8. Visa, Merchant surcharging considerations and requirements
9. Visa, Visa Core Rules (public edition)
10. Maine Revised Statutes, Title 9-A, section 8-509
11. Colorado Revised Statutes, section 5-2-212
12. New Jersey Division of Consumer Affairs, Credit card surcharges FAQ
13. New York Department of State, Credit card surcharge reference guide
14. US District Court, E.D.N.Y., docket 05-md-1720 (CourtListener)
15. PaymentsJournal, Mastercard assessment fees (secondary source)
16. Arnall Golden Gregory, The proposed Visa and Mastercard settlement and surcharging (secondary source)
17. Cooley, District court vacates Regulation II debit interchange fee standard (secondary source)
18. America’s Credit Unions, Fed interchange rule challenge heard in appeals court (secondary source)
19. Bass, Berry & Sims, Oklahoma formally allows credit card surcharges (secondary source)
20. Payments Dive, Court approves Visa and Mastercard settlement (preliminary approval, June 2026; secondary source)
21. ABA Banking Journal, IFPA permanently enjoined for most banks and card networks (secondary source)
22. WGLT, Illinois lawmakers delay credit card swipe fee law (secondary source)