The short answer
"Credit card processing fees" is shorthand for the whole stack of charges that hit every card transaction. There are three layers:
- Interchange — paid to the issuing bank (the one that gave the customer the card). Roughly 1.6%-2.6% of the transaction depending on card type. Set by Visa/Mastercard. Not negotiable.
- Network assessments — paid to the network (Visa, Mastercard, Amex, Discover). 0.13%-0.15% on most transactions. Set by the network. Not negotiable.
- Processor markup — paid to your acquirer (Stripe, Square, your IC+ processor). This is the only piece you can actually negotiate. 0.20%-0.60% on interchange-plus; baked into the blended rate on flat-rate and tiered.
Stack them together and you land at a real all-in effective rate of 2.4-3.5% on typical e-commerce. About 85% of that is interchange, 5% is assessments, and 10% is the piece that goes to your processor.
Where your negotiation power actually lives
Most operators assume they're fighting over the whole 2.9% Stripe quotes them. They're not — they're fighting over roughly 30-60 basis points of processor markup sitting on top of 2.3-2.5% of fixed cost. Understanding this changes how you negotiate:
- Don't argue with your processor about "interchange rates being too high." They can't change interchange.
- Do argue about the markup over interchange. At $100k+/mo, 25-35 bps is a reasonable target. At $500k+/mo, 15-22 bps. See processor markup.
- Do argue about per-transaction fees. $0.05-$0.10 is fair; $0.30 at scale is excessive.
- Don't get distracted by headline tier rates. Compute your true-cost effective rate and negotiate against that number.
What operators need to know
- Card mix is destiny. A portfolio of rewards-heavy cards costs more than a debit-heavy portfolio by 40-80 basis points, and neither you nor your processor controls what customers swipe.
- Card-not-present costs more. CNP interchange is 30-60 bps higher than card-present. You don't have a choice if you're e-commerce, but know the tradeoff.
- MCC sets the floor. Some categories (supermarkets, charities, utilities) qualify for preferential interchange. Most e-commerce does not. See MCC code.
- International cards are expensive. Cross-border interchange adds 80-150 bps plus network cross-border assessments. If 10% of your customers are international, your effective rate climbs ~15 bps just from that.
- The only way to materially drop total cost is scale. Bigger portfolios negotiate lower markup; they can't negotiate interchange.
Why multi-brand operators care
Running 4 brands on 4 separate processors means paying 4 separate markup stacks on top of the same interchange. Consolidating through multiflow's parent merchant account lets your negotiation leverage scale with total portfolio volume — interchange stays fixed, but the markup collapses 40-60% on the blended number. See the consolidation case study for a worked $1.2M/yr portfolio.