By Kyle Hall
Published: Dec 11, 2025
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Merchants looking for high risk credit card processing will want to know the fees associated with their account. It's important to understand which fees apply to the various transactions in an online purchase. Accepting credit cards is a great way to expand your market, but how do you find the lowest processing fees? Be prepared to shop for different merchant account providers and see which is most suitable for your business.
Accepting credit card payments online often involves payment processing fees. Each time a customer pays using a credit card, the respective card company charges the merchant a processing fee. So, this means that you don't receive the full charge every time someone pays with their cards. Processing fees are often made up of a couple of different fees. Some fees are charged every time someone makes a purchase. These include:
However, on top of these, you may also have to pay monthly or yearly subscriptions to processing services. Also, merchants may have to pay initial set up costs for credit card processing and for any physical credit card terminals needed. Individually, these fees may not seem like much but can quickly add up.
PayPal credit card processing fees are at a standard rate for companies. It's usually around 2.9% of total revenue, plus $0.30 per transaction.
Square credit card processing fees are identical for USA online transactions at 2.9% and $0.30 per transaction.
High risk credit card processing fees range per business, industry, and the amount of volume you're processing. In general, there is often a premium associated with high risk merchant accounts. The fees usually range from 2% – 5%. The variability is due to the range of businesses that fall under the umbrella of high risk. If you're a large company with an established history, you'll have lower rates than a startup with a limited sales history.
The cost of processing fees often varies on a couple of factors. Transaction fees may sit between one and three percent for each transaction. For example, a $5 purchase would come with a processing fee of up to $0.15. This is why a lot of retailers often charge a minimum on the use of credit card machines. Keep in mind, the rate varies depending on whether a merchant is selling high or low risk goods.
On top of this, merchant processing services charge a fee for credit card transactions. Transaction fees often add on another two cents worth of fees. Monthly charges are often more substantial but may even out over time. Consequently, the more you use your credit card processing service, the better value you get for your money.
Processing services often charge around $13 a month for processing and between $65 and $130 for their initial setup. Set up fees are one-off payments, as is the cost of any equipment that you buy. Card machines usually cost between $65 and $100 for one unit. Merchants may also have to pay a PCI compliance fee each month. This is around $4.50.
The final costs are chargeback fees. A chargeback occurs when the funds collected must be returned back to a customer. This involves an initial processing fee plus a chargeback. Chargebacks are a high risk transaction. Consequently, they will cost a merchant much more. These fees can start at $10 and go up from there.
Credit card processing fees depend upon many factors. The scale of the credit card company a merchant uses can vary the price of fees. Additionally, the type of merchant you are and the goods you sell impact the fees. A high risk merchant who sells CBD may have higher fees than a low risk merchant who sells produce. The bank you use will charge their processing fees, as will different credit card providers. This is why it's a good idea to make sure you use a bank that accepts all major credit cards to help lower fees.
Different payment processors will also charge different fees. They may also present you with different payment plans for their fees. For example, some processing services incorporate your transaction charges into their monthly bills. Others will deduct the charges as you go. Many providers also offer mid-qualified or non-qualified rates. Often, they will advertise the qualified rates that they offer debit card transactions. Mid-qualified rates are usually better than non-qualified transaction rates. These rates only work for selected credit cards. Non-qualified services will allow you to accept payments from any credit card users but will charge you more each time.
Merchants need a fee structure that best suits their market. Choosing a fee structure that complements a merchant's business model is key for lowering credit card processing fees. If a merchant's stock consists mostly of expensive items, then you want to go for the lowest percentage rate possible. In this case, a merchant may opt for an interchange rate rather than a flat fee. Interchange rates charge a percentage of the transaction price. This covers the interchange rate and the assessment fee.
For low to mid-price transactions, you need to take a look at how much the 0.1% percentage difference is worth. If it's usually worth more than $0.30 then you should opt for an interchange rate. However, if it's less than $0.30 then a flat fee rate is probably best for you.
Setting a minimum for credit card payments helps merchants combat processing fees in two ways. First, it encourages customers to use an alternate form of payment who don't want to spend much. This results in merchants not being charged a processing fee at all. However, if customers do want to pay on credit cards, setting a limit balances out some of the expensive fees. Many merchants set their minimum spend on a credit card at $5 or $10. As a result, merchants will make more profit overall and can absorb some of the setup and maintenance costs of processing.
Providers charge less if you ask customers to use the most secure methods of payment possible. Using a chip reader is the most secure checkout method to date. So, processors offer discounts since the margin for error has been minimized. Chip readers are much better than asking customers to swipe their cards or tap their contactless. Using a chip reader means that you remain EMV compliant, and therefore more secure. For online merchants, make sure you sign up for a secure payment site. Redirecting customers to a secure checkout might take a little longer, but it will save money in processing fees.
Merchants will never be able to avoid credit card processing fees completely. However, merchants can forward these fees to customers. This can be done by factoring in the amount it costs to process a product into the displayed price. This practice is called surcharging. Surcharging is a legal practice. But, credit card processing companies have strict guidelines that must be adhered to.
Credit card processors play a big role in ensuring customer satisfaction. Additionally, they provide a safe and secure way to receive payments. So, it is important to ensure quality when looking for a credit card provider. Merchants want a provider that can guarantee that they handle service securely. For more information on this, it's always worth looking for reviews from previous clients online. This may bring up any red flags that you should know about before you sign up for a service. Another important thing to look for in a processor that has good customer support.
When it comes to getting a good deal on credit card processing, shopping around is the key. PayKings can take the hard work out of it by finding merchants the best rates around. With over twenty trusted and proven bank relationships, PayKings has so many options to choose from. Our payment processing experts can help merchants decide which option best suits their business. Additionally, we can even guide merchants through the steps on the implementation of their new credit card processor!
Credit card processing fees are the costs businesses pay to accept a payment card from a consumer. These fees come from several parties in the payment card industry, including the issuing bank, the acquiring bank, the payment network such as Visa, Mastercard, or Discover card, and the payment processor. Together, these charges make up total payment processing costs. PayKings merchant services provides transparent payment processing fees and strives to keep costs down for merchants.
An interchange fee is the portion of the transaction that goes to the credit card issuer. It is one of the largest components of merchant processing fees. Interchange fees vary based on the payment card type, merchant category code, how the card is accepted, and whether the sale is in person, online, or through a mobile payment.
Flat rate payment processing charges are the same percentage and transaction fee for every sale even if the interchange fee is different for different transactions. Interchange plus pricing lets merchants see the actual interchange rate, which can vary from transaction to transaction and adds a fixed markup. The benefit of flat rate payment processing is that merchants know exactly how much they’ll be paying for each transaction. The benefit for merchants utilizing a payment processor with an interchange plus pricing model allows them to make sure they are not overpaying on low cost transactions. Interchange plus pricing (such as the pricing PayKings offers) can help your business save money.
Your point of sale system and card reader both affect card processing costs. Modern POS systems that support EMV chips and contactless payment often qualify for lower fraud risk and may help keep payment processor fees lower compared to manual entry transactions. Through PayKings you can acquire POS terminals for your payment processing needs.
In most cases, contactless payment fees are similar to standard chip transactions. Using digital wallets can also help reduce fraud, which protects both the merchant and the financial institution issuing the payment card.
A payment gateway securely transmits transaction information between your POS system, payment network, and acquiring bank. Gateways often charge their own software or transaction fees that contribute to total online payment processing fees. PayKings can provide secure and affordable payment gateways for merchants in need of payment processing.
The Payment Card Industry Data Security Standard, often called PCI DSS, is a security policy designed to protect customer information. Compliance helps reduce credit card fraud, data breaches, and financial penalties. Non compliance can increase processing credit card costs and risk exposure.
Automated Clearing House payments, also known as ACH, typically have lower processing costs than credit cards. They are often used for invoice payments, recurring billing, and business to business transactions where lower payment processing costs are a priority.
A surcharge is an added fee passed to the customer to help offset merchant processing fees. Surcharge policies vary by state and card brand, and they must follow strict payment network rules. Some businesses choose discounting instead, where cash payments receive a lower price.
For low risk merchants, the average credit card processing rate usually falls between 1.5% and 3.5% per transaction, depending on card type, fraud risk, merchant category code, and sales channel. High risk businesses can expect credit card processing rates from 3.5% to 10%. Keep in mind that online payment processing fees are typically higher than in person point of sale transactions. PayKings offers some of the lowest rates you can find for high risk processing.
The cheapest cc processing solution depends on business size, average ticket, industry, and risk profile. Businesses focused on lowest cc processing fees should compare flat rate payment processing to interchange based pricing and review all payment processor fees, including monthly software and statement charges. Check out PayKings for cheap credit card processing for high risk merchants.
High levels of credit card fraud and charge disputes increase costs for payment networks and financial institutions. This often leads to higher merchant processing fees, reserve requirements, or even account termination. Using secure POS systems, encryption, and verification tools helps to mitigate fraud.
In many cases, payment processing costs are considered a business expense and may be deducted for tax purposes. Business owners should always consult a tax professional for proper finance and accounting guidance.
Each brand within the payment card industry sets its own interchange fees. A Mastercard transaction may carry a different rate than a Discover card or Visa. Business type, customer usage, and transaction method all affect pricing as well.
Merchants can reduce credit card processing costs by optimizing their POS setup, avoiding manual key entry, using secure encryption, choosing the right payment gateway, monitoring fraud, reviewing their invoice monthly, and selecting pricing that fits their sales volume and payment behavior.
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Kyle Hall is a fintech entrepreneur, software engineer, and marketing strategist with over a decade of experience in high-risk payment processing and SaaS development. He is the CEO of PayKings, a lea...
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