Payment Processing Fee Glossary
A plain-language reference for every fee on your merchant statement. Understand what you're paying, who sets the fee, and whether it's negotiable.
Glossary A-Z
16 terms defined
Assessment Fee
A fee charged by the card networks (Visa, Mastercard, Discover, Amex) on every transaction. Assessments are separate from interchange and are based on total monthly volume. They typically range from 0.13% to 0.15% and are non-negotiable.
AVS Fee
Address Verification Service fee. A small per-transaction charge (usually $0.01-$0.05) for verifying that the billing address provided by the cardholder matches the address on file with the card issuer. Common in card-not-present (eCommerce) transactions to reduce fraud.
Batch Fee
A fee charged each time a merchant settles (batches out) their terminal at the end of the day. Typically $0.10-$0.25 per batch. Some processors waive this fee entirely. PaySec does not charge batch fees.
Chargeback Fee
A fee assessed when a cardholder disputes a transaction and the issuing bank initiates a chargeback. Chargeback fees typically range from $15 to $50 per occurrence and cover the processor's administrative cost of handling the dispute, regardless of the outcome.
Cross-Border Fee
A fee charged when a transaction involves a card issued in a different country than the merchant's processing country. Cross-border fees are assessed by the card networks and typically range from 0.40% to 1.00% of the transaction amount, on top of standard interchange and assessments.
Discount Rate
The total percentage rate a merchant pays on each transaction. In bundled pricing, the discount rate includes interchange, assessments, and the processor's markup rolled into a single number. In interchange-plus pricing, these components are broken out separately for transparency.
Dues and Assessments
Collective term for the fees charged by card networks (Visa, Mastercard) on all transactions. These include assessment fees, NABU/APF fees, and other network charges. They are set by the networks, not the processor, and are passed through at cost in interchange-plus pricing models.
Early Termination Fee
A penalty charged by some processors if you cancel your merchant account before the end of a contract term. ETFs can range from $250 to $500 or more. PaySec does not charge early termination fees — all accounts are month-to-month.
Gateway Fee
A monthly fee charged for access to a payment gateway that routes eCommerce transactions to the processor. Gateway fees typically range from $10 to $25/month, sometimes with an additional per-transaction fee. Some processors include gateway access at no extra charge.
Interchange Fee
The largest component of payment processing cost. Interchange fees are set by the card networks (Visa, Mastercard) and paid by the merchant's processor to the card-issuing bank. Rates vary by card type (debit, credit, rewards, corporate), transaction method (swiped, keyed, eCommerce), and merchant category. Typical range: 0.05% + $0.21 for regulated debit to 2.40% + $0.10 for premium rewards cards.
Markup
The processor's fee on top of interchange and assessments. This is the only negotiable component of payment processing cost. In interchange-plus pricing, the markup is stated clearly (e.g., interchange + 0.20% + $0.08). In bundled or tiered pricing, the markup is hidden inside the overall rate.
Minimum Monthly Fee
A minimum processing fee that a merchant must pay each month regardless of transaction volume. If your actual processing fees for the month fall below the minimum (commonly $25), you pay the difference. This fee discourages processors from maintaining low-volume accounts at a loss.
PCI Compliance Fee
A monthly or annual fee charged by some processors for PCI DSS compliance support. Fees range from $7 to $20/month. Some processors also charge a PCI non-compliance fee ($19-$99/month) if the merchant has not completed their annual PCI Self-Assessment Questionnaire. PaySec does not charge PCI compliance or non-compliance fees.
Retrieval Fee
A fee charged when a card issuer requests a copy of the original transaction receipt before initiating a formal chargeback. Retrieval requests are an early warning that a dispute may follow. Fees typically range from $5 to $15. Responding promptly to retrievals can prevent the dispute from escalating to a chargeback.
Statement Fee
A monthly fee for the generation and delivery of a merchant processing statement. Typically $5 to $15/month. This fee is a legacy charge from when statements were mailed physically. Many modern processors, including PaySec, provide online statements at no charge and do not assess a statement fee.
Surcharge
An additional fee that a merchant adds to a credit card transaction to cover the cost of processing. Surcharging is legal in most U.S. states but has specific rules: it cannot be applied to debit cards, it must be disclosed clearly, and it is capped at 3% (or the merchant's actual cost, whichever is lower). Not the same as a cash discount.
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