Every card fee you pay sits in one of three layers. Interchange is the wholesale fee the card networks set and the issuing bank keeps. Assessments are the smaller dues the networks keep for running the rails. Markup is what your processor and sales organization add on top. The first two pass through at cost. The third is the only layer anyone competes on. Mixing them is how statements stay illegible, and how a "lower rate" can still cost more.
Set by the card networks, paid to the issuing bank. Hundreds of categories. No processor sets it or can waive it.
Network dues: a small percentage, sometimes with per-item or volume-based components. Also pass-through.
The margin your processor and sales organization add, plus monthly extras they control. The only layer anyone competes on.
Interchange: the floor you cannot negotiate
Interchange is the fee built into every card sale. The networks publish it. The bank that issued the customer's card keeps it. For a given merchant category, card product, and acceptance method, it is the same no matter who boards you. Your agent cannot discount it. Your processor cannot waive it.
It is also the largest layer. U.S. banks collected nearly $66 billion in interchange ("swipe") fees in 2025, up from $64 billion in 2024 (Federal Reserve Bank of St. Louis, 9 Apr 2026). That money covers issuer processing, fraud tools, and rewards. When a customer pays with a premium rewards card, the extra interchange is how the issuer funds the miles.
The rate is not one number. Two $80 sales can carry different interchange because of:
- Card type. Basic debit is cheaper than rewards or corporate credit.
- How the card is captured. Card-present (dipped or tapped) generally qualifies cheaper than keyed or card-not-present.
- Merchant category. Networks publish different schedules by business type.
- Data passed. Complete transaction data can qualify a sale into a cheaper category.
Debit is a special case. Under the Federal Reserve's Regulation II, debit interchange received by issuers with $10 billion or more in assets is capped at 21 cents plus 5 basis points of the transaction, plus up to 1 cent if the issuer meets the fraud-prevention standard. Issuers under $10 billion are exempt (Federal Reserve, Regulation II compliance guide, last update 23 Jun 2023). Credit is not capped that way, so rewards credit always costs more in this layer than regulated debit, even on the same markup.
Assessments: the network's own cut
Assessment fees are what the networks charge for using their brands and rails. They are smaller than interchange, and they are also pass-through. No one in the chain marks them up or negotiates them away.
Each network sets its own schedule. The common shape is a small percentage of volume, sometimes paired with a per-item fee. Some charges are volume-based or outlet-based rather than per swipe. Visa's Fixed Acquirer Network Fee (FANF) is the well-known example: a network charge, not a processor invention, sized by how you accept cards and how many locations you have. Do not treat a FANF line as markup just because the acronym looks like jargon.
On an interchange-plus statement, assessments usually appear on their own lines. On a tiered, flat, or bundled statement they are still there, folded into the quoted rate. Bundling does not make them negotiable. It only makes them harder to check against the published schedule.
Markup: the only layer a quote is actually selling
Markup is everything your provider adds after the two wholesale layers. It can show up as:
- A percentage of volume (the "plus" on interchange-plus)
- A per-item or per-authorization fee
- Monthly extras: statement, batch, PCI program, gateway, and "regulatory" or "network access" fees that are not on any network schedule
The last group is still markup. A fee is not pass-through because someone labeled it "network." If you cannot match it to a published network schedule, treat it as negotiable until proven otherwise.
This is the layer a salesperson can actually move, and the layer pricing models rearrange. Interchange-plus itemizes it. Tiered pricing hides it inside qualified, mid-qualified, and non-qualified buckets the processor defines. Flat rate blends it into one percentage. Surcharge and dual pricing can shift some cost to the cardholder, where state and brand rules allow, but the three layers still sit underneath. None of those models is automatically cheaper. They change what you can see, and who pays.
A worked month (illustrative)
Take $50,000 in card volume and 1,000 settled transactions. These figures are illustrative, not a quote.
| Layer | How it is billed | This month |
|---|---|---|
| Interchange | Network schedule, varies by card | $1,050 |
| Assessments | Network percentage and per-item | $75 |
| Markup | 0.25% + $0.10, plus $35 in monthly extras | $125 + $100 + $35 = $260 |
| Total fees | $1,385 | |
| Effective rate | $1,385 ÷ $50,000 | 2.77% |
Freeze the markup and swap in more rewards cards: interchange rises, total fees rise, the quoted "rate" does not. Freeze the mix and cut the plus from 0.25% to 0.15%: only the markup line moves. If a new quote will not show these three columns, you cannot tell which layer changed.
Effective rate is the comparison number: total fees divided by gross card volume for the same period. How to find both inputs is in how to read your merchant statement. Typical total processing cost is often described as 1.5 percent to 3.5 percent of the transaction plus a per-item fee (U.S. Chamber of Commerce, How to Calculate Credit Card Processing Fees, Jun 2026). That is a typical range, not anyone's offered rate.
How to tell the layers apart on a real statement
Work top to bottom:
- Find volume. Gross card sales, not net deposits.
- Find interchange. Look for category names and amounts that move with card mix.
- Find assessments. Short lines near interchange: brand assessments, acquirer processing fees, FANF, network access charges. Small dollars relative to interchange.
- Treat the rest as markup. Discount, "qualified rate," per-item, batch, PCI, statement, gateway, annual, "compliance." Add them.
- Divide. Total fees ÷ volume. That is what you paid.
If interchange and assessments are missing as lines, you are on a bundled model. The layers still exist. You cannot audit them without an itemized equivalent on your actual volume. A provider willing to show interchange-plus math is showing the work. A provider who will not is asking you to trust the bundle.
What you can change, and what you cannot
You cannot negotiate interchange or assessments. You can:
- Change the markup: the plus, the per-item, the monthly extras that are not on a network schedule.
- Change the model, so the markup is visible, or so some cost sits with the cardholder where that is legal.
- Change qualification. Card-present where the card is present, timely batch, complete data. That does not lower the published schedule. It can keep a sale out of a more expensive category.
The test for any new offer is the same three columns plus effective rate, on your mix, not on a teaser qualified rate. If you would rather not hunt the lines by hand, upload last month's statement. As-billed first. Pass-through versus markup. Then the models the statement actually supports.
FAQ
What is the difference between interchange and assessments? Interchange is paid to the bank that issued the customer's card. Assessments are paid to the card network for using its rails. Both are pass-through; markup is everything your processor adds on top.
Can I negotiate interchange fees with my processor? No. Interchange is set by the networks and paid to issuers, so a processor cannot discount it. If someone claims to lower interchange, ask whether they mean better qualification or a lower markup relabeled as interchange.
Why do rewards cards cost more to accept? Issuers fund rewards from interchange. Premium and rewards credit sit in higher published categories than basic debit. U.S. banks collected nearly $66 billion in interchange in 2025 (Federal Reserve Bank of St. Louis, 9 Apr 2026). That is not a processor surcharge on miles.
Is a FANF fee the same as processor markup? No. Visa's Fixed Acquirer Network Fee is a network charge that belongs with assessments, sized by volume, outlets, and how you accept cards. Match it to how you actually accept cards before you treat the line as padding.
What is a typical range for credit card processing fees? Typical processing fees are often described as 1.5 percent to 3.5 percent of the transaction plus a per-item fee (U.S. Chamber of Commerce, Jun 2026). That is a typical range, not a quote. Your number is effective rate: total fees divided by card volume for the same period.
Sources
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