Payment Gurus
POS Systems Terminals Card Processing Cash Discount ATM Programs Recurring Billing Gift & Loyalty High-Risk Processing About Contact
Help Sign in Get started
Home/Credit Card Processing

Credit card processing, demystified.

Most merchants overpay because no one ever explained what they're paying for. We break down the pricing models, the equipment, the fees on your statement, and the red flags — then quote you honestly. No contracts, no surprises.

Get a statement analysis Talk to us · (888) 556-7356
4
Pricing models we configure
$0
In contract termination penalties
Same-day
Funding on settled transactions
24/7
Live human support
The honest take

Most merchants overpay by 30% or more.

The credit card processing industry has spent decades building pricing schemes designed to confuse you. Tiered pricing. Non-qualified buckets. PCI fees. Annual fees. Batch fees. Statement fees. By the time you see a real number on your statement, the markup buried in there is usually two to three times what it should be.

The fix isn't a magic trick — it's understanding what you're actually being charged for. Once you know the difference between interchange (the real cost) and the processor's markup (the negotiable part), you can spot a good deal in five seconds and a bad one even faster.

This page walks through the four pricing models you'll encounter, the equipment options that fit your business, what's actually on your statement, and the red flags that signal you're getting taken advantage of.

Pricing models

Four ways processors charge you.

Each has a use case. None is universally best — but two are usually a much better deal than the other two.

Interchange-Plus
Transparent, true cost-plus.

You pay the actual interchange rate set by Visa/Mastercard/Discover/Amex (a published, fixed number), plus a small disclosed markup that goes to the processor. Both numbers appear on every transaction.

No hidden buckets or tiered surcharges
Easy to compare apples-to-apples with other processors
Lowest effective rate for most merchants over $10K/month
Effective rate fluctuates with your card mix month-to-month
Best for: Most established businesses processing $10,000+ per month. Our default recommendation.
Cash Discount
Merchant pays $0 in fees.

The processing cost is passed to the customer as a transparent service fee at checkout, capped at the merchant's actual cost of acceptance. Cash and debit purchases are discounted. Your fee total: $0/month.

Eliminates 3–4% of revenue going to processing fees
Legal in all 50 states when implemented compliantly
Most merchants save $1,000–$5,000+ per month
Some customer pushback in low-margin / loyalty-driven businesses
Best for: Service businesses, B2B, restaurants, and retail in markets where customers expect surcharging.
Flat Rate
Square/Stripe pricing.

You pay one simple number on every transaction — typically 2.6%–2.9% plus a small fixed fee. Easy to understand, easy to budget, and easy to overpay on.

Predictable monthly costs
No statement to interpret
Pays 30–50% more than interchange-plus on most card mixes
No room to negotiate as you scale
Best for: Brand-new businesses under $5K/month, or operations that genuinely value simplicity over savings.
Tiered
Qualified / mid-qualified / non-qualified.

The processor groups transactions into three buckets — "qualified," "mid-qualified," and "non-qualified" — each with its own rate. The catch: the processor decides which bucket each transaction lands in, and most land in the expensive buckets.

Looks simple in the pitch
"Qualified" rates only apply to a tiny slice of transactions
Effective rates often 30–60% higher than interchange-plus
The industry standard hiding spot for inflated margins
Best for: Honestly? Almost nobody. We configure tiered when a merchant specifically requests it, but we'll always show you the interchange-plus alternative first.
Equipment

Four ways to accept the card.

The right hardware depends on how and where you take payments — not on what the salesperson is pushing this quarter.

01 / Standalone terminal

Countertop card readers

Dejavoo, PAX, Verifone, Ingenico, and Valor terminals. Plug in, swipe/tap/insert, done. Best for businesses that need a reliable card reader without a full POS — barbershops, dry cleaners, mobile services, professional offices.

02 / POS system

All-in-one register

Clover, Square, SpotOn, NCR Aloha, and more — see our POS systems page. Best for restaurants, retail, and any business where you need inventory, employees, reporting, and payments in one device.

03 / Mobile reader

Phone- or tablet-based

Compact Bluetooth readers that pair with iOS or Android. Best for mobile service businesses — repair techs, food trucks, market vendors, tradesmen. Same compliant processing on the road as in a storefront.

04 / Virtual terminal & gateway

Online & phone payments

NMI, Authorize.net, USAePay, and similar gateways. Best for eCommerce, recurring billing, B2B invoicing, and businesses that take payments over the phone. We integrate with most major shopping carts and billing platforms.

Reading your statement

What you're actually paying for.

Every credit card transaction has three fee components. Once you know what to look for, your statement stops being confusing.

Interchange

The fee charged by the card-issuing bank (Chase, Capital One, etc.) and routed through the card brand. This is the real cost — it's a published rate that every processor pays, ranging from about 1.5% on debit cards to 3%+ on premium rewards cards. Interchange is non-negotiable. Anyone who promises to "lower your interchange" is lying.

Assessments

A small fee charged by Visa, Mastercard, Discover, and Amex on top of interchange — typically around 0.13% plus a few cents per transaction. Also non-negotiable. It goes to the card brand.

Processor markup

Everything else. This is the only part that's negotiable. The processor adds their margin on top of interchange and assessments. On interchange-plus pricing, you see this number clearly. On tiered pricing, it's hidden inside the rate buckets. On flat-rate pricing, it's baked into the 2.6%–2.9% you see.

InterchangeCard-issuing bank's fee — non-negotiable
1.80%
AssessmentsVisa/MC/Discover/Amex network fee
0.13%
Processor markupThe negotiable part
0.30%
Effective rate
2.23%

Example assumes a typical card mix on interchange-plus. Your actual rate depends on the cards your customers swipe.

Red flags

If your processor does any of these, it's time to switch.

Tiered pricing with no interchange-plus option

The whole point of tiered pricing is to hide markup inside opaque buckets. A good processor will at least offer interchange-plus.

3-year contracts with early termination fees

$300–$500 ETFs are standard at predatory processors. Honest processors don't need contracts to keep customers — they earn it month to month.

PCI "non-compliance" fees suddenly appearing

If you've been compliant for years and a $30/month PCI fee shows up out of nowhere, the processor is gambling you won't notice. Call them.

Rate increases without notice

Card brands raise interchange twice a year. Sketchy processors use these increases as cover to bump their own markup, too. Always check.

Statements you can't actually understand

If your statement runs 8 pages with line items you've never heard of, that's the design. Honest statements show interchange, assessments, markup, and total. Three lines.

"Free" terminal that locks you in

"Free" equipment is the classic bait. The processor recoups the cost (plus margin) through higher rates and a multi-year contract. Real equipment costs $200–$500. Pay for it and keep your freedom to switch.

How we're different

Pricing that fits on one page.

Interchange-plus by default

We quote interchange-plus to every merchant who'll let us, because it's the only pricing model that aligns our incentives with yours. The interchange you pay is the interchange we pay — we keep our markup clearly disclosed.

Cash discount when it fits

For service businesses, B2B, and any operator who wants to eliminate processing fees entirely, our compliant cash discount / dual pricing program drops your monthly processing cost to $0. We handle the signage, terminal configuration, and ongoing compliance.

No contracts, no penalties

We don't lock merchants in. If we're not earning your business, you should be free to leave — and if you're currently stuck on a long-term contract, we'll help you time your exit to avoid the early termination fee.

Real humans, on speed-dial

Every account gets a dedicated rep who knows your business. When your terminal stops working at 8pm on a Friday, that's the number you call. Not a queue, not a chatbot.

Same-day funding

Settled by morning, in your bank by close of business. Standard, not premium.

Frequently asked

Credit card processing, answered.

What is the cheapest credit card processing pricing model?

Cash discount is the only model where the merchant pays $0 in processing fees — the cost is passed to the customer as a transparent surcharge. For merchants who don't want to use cash discount, interchange-plus is typically the cheapest option because it shows the true cost (interchange) plus a small disclosed markup, with no hidden buckets or tiered surcharges.

What is interchange-plus pricing?

Interchange-plus pricing shows you two numbers on every transaction: the interchange fee (what Visa, Mastercard, Discover, or Amex actually charges, which is a published rate) plus a disclosed markup that goes to the processor. It's the most transparent pricing model in the industry. Most savvy merchants pay interchange-plus.

Is cash discount legal?

Yes. Cash discount programs are legal in all 50 states when implemented correctly. The card brands (Visa, Mastercard) require that the surcharge be disclosed clearly at point-of-sale and on the receipt, capped at the merchant's actual cost of acceptance (typically 4%), and that cash and debit are exempt. Compliant cash discount programs follow all these rules.

What's the difference between cash discount and surcharging?

They're similar but treated differently by the card brands. A surcharge is added to credit card transactions on top of the listed price. Cash discount programs raise the listed price and then discount cash and debit purchases. The economic effect is the same, but compliant cash discount programs follow card-brand surcharging rules and avoid the registration requirements that pure surcharging triggers.

Do I need a long-term contract for credit card processing?

Not with us. Many processors lock merchants into 3-year contracts with early termination fees of $300 to $500. Payment Gurus doesn't use those — you can leave at any time without penalty. If you're with another processor on a long-term contract, we can often analyze your statement and time your switch to avoid the termination fee.

How do I read my merchant processing statement?

Your statement has three main fee categories: interchange (what the card brands charge, typically 1.5–2.5% depending on card type), assessments (Visa/Mastercard's small percentage and per-item fee), and processor markup (what your processor keeps). Add them up and divide by your total volume to get your effective rate. Send us a statement and we'll break it down line-by-line.

Send us a statement. We'll show you what you'd save.

Three months of statements is all we need. We'll do a line-by-line analysis and quote you honestly — usually within one business day. No commitment, no sales pressure.

Get a statement analysis Call (888) 556-7356
Related solutions

Other ways we help merchants.

Cash Discount & Dual Pricing

Pay $0 in processing fees. The compliant dual pricing program, explained.

POS Systems

Clover, Square, SpotOn, NCR Aloha, and more — configured and supported.

Cash Advances

Working capital against future processing. No personal guarantees.

High-Risk Processing

Specialized accounts for businesses other processors decline.