Card brand fees are the charges assessed by credit card companies like Visa, Mastercard, American Express, and Discover on every transaction processed through their networks. As a merchant, you’re likely already paying these fees, which are typically around 2-4% of the total transaction amount, depending on your card type and processor.
While you can’t avoid paying card brand fees, there are a few things you can do to reduce the amount you pay. One is to offer discounts for customers who pay with cash or check. Another is to pass along the fee to your customers by adding a surcharge to credit card transactions.
Of course, before you start adding surcharges, it’s important to understand the rules and regulations surrounding them. We’ll cover all of that in this guide, along with some tips on how to keep your card brand fees low.
What Are Card Brand Fees?
Card brand fees are the charges assessed by credit card companies on every transaction processed through their networks. These fees are typically around 2-4% of the total transaction amount, depending on your card type and processor.
As a merchant, you’re likely already paying these fees, which can add up quickly if you’re processing a lot of transactions. There are a few things you can do to reduce the amount you pay, but it’s important to understand the rules and regulations before taking any action.
What Are the Different Types of Card Brand Fees?
There are four major credit card companies that assess card brand fees: Visa, Mastercard, American Express, and Discover. Each company has its own fee structure, so it’s important to understand how each one works before you start accepting credit cards.
Visa:
Visa charges a 1.51% fee for all domestic transactions and a 2.11% fee for international transactions. There is also a $0.10 per transaction fee for all Visa cards.
Mastercard:
Mastercard charges a 1.55% fee for all domestic transactions and a 2.15% fee for international transactions. There is also a $0.10 per transaction fee for all Mastercard cards.
American Express:
American Express charges a 2.5% fee for all transactions, both domestic and international. There is also a $0.10 per transaction fee for all American Express cards.
Discover:
Discover charges a 1.56% fee for all domestic transactions and a 2.16% fee for international transactions. There is also a $0.10 per transaction fee for all Discover cards.
How Are Card Brand Fees Calculated?
Card brand fees are typically a percentage of the total transaction amount, plus a per-transaction fee. The exact amount you’ll pay depends on your card type and processor, but it’s typically around 2-4% of the total transaction amount.
For example, let’s say you’re processing a $100 credit card transaction. If your processor charges a 3% fee, you’ll owe them $3 in card brand fees. If your processor charges a $0.10 per-transaction fee, you’ll owe them an additional $0.10, for a total of $3.10 in fees.
These fees can add up quickly, so it’s important to understand how they work before you start accepting credit cards.