Credit card processing fees: what determines your rate and why the lowest isn't always the cheapest

In the US, credit card processing fees, also known as the merchant discount rate (MDR), typically fall somewhere between 1% and 3.5% of the transaction value, depending on the market, the card type, and how the payment is processed. That total consists of three separate components, each determined by a different party:

1. Interchange is paid to the cardholder's issuing bank and is the largest component of most transactions.

2. Scheme fees go to the card network itself, Visa, Mastercard, and others, for the use of their infrastructure.

3. Processor markup goes to your payment provider and is the only one your provider actually controls.

Rates vary by network. A standard Mastercard transaction typically falls between 1.95% and 2.60% plus a small flat fee, with both Visa and Mastercard falling back to a non-qualifying rate of around 3.15% plus USD $0.10 when a transaction doesn't meet data requirements. Combined, the average Visa and Mastercard swipe fee, or credit interchange rate, reached 2.36% in 2025, according to the Merchants Payments Coalition, citing data from the Nilson Report. American Express and Discover tend to run slightly higher, partly because American Express often acts as both the credit card network and the issuing bank. For the full published rate tables, see and .

Much of your processing fee has already been determined before your payment provider enters the picture. Here's how each component is set and where you have room to influence the overall cost.

Several factors determine where in the interchange fee range a transaction lands:

• Card type: Debit cards generally carry lower interchange than credit cards,

  while rewards and corporate cards can carry higher rates depending on the market and network. The exact cost varies based on the card type, issuer, and applicable scheme rules.

• Transaction method: In-person transactions tend to sit at the lower end of the range. Card-not-present transactions, including online and phone orders, can sit higher because they typically carry greater fraud risk for the issuing bank.

• Merchant category code: Retail and ecommerce businesses typically fall into different MCC categories, each carrying its own default interchange rate, while B2B credit card processing fees tend to run higher due to the commercial card types commonly used in those transactions.

These costs aren't negotiable in the same way as your provider's markup, but that doesn't mean they're entirely outside your influence. How a transaction is processed, what data accompanies it, and which network it routes through can all shift a transaction into a lower-cost category. Here are some of the ways to do that.

Negotiating your provider's markup is a starting point. But lowering the total cost of payments often means looking beyond the quoted rate and understanding how each transaction is processed. Here's where to focus:

Process locally rather than cross-border

Like mobile roaming fees, transactions processed locally tend to be cheaper than those processed cross-border. Using local acquiring can reduce per-transaction costs while also improving approval rates, as domestic transactions typically encounter less friction with local issuing banks.

Support different payment methods

Giving customers more ways to pay alongside cards can reduce reliance on card schemes and help optimize transaction costs, particularly in markets such as Singapore, where consumers use a diverse mix of cards, wallets, and local payment methods.

Optimize your transaction routing

Rather than sending every payment down the same fixed route, directing each transaction through the best-performing network can help manage costs while reducing declines.

Share additional data to the schemes

Sending richer transaction data with each payment, such as billing details or line-item information, can help eligible transactions qualify for lower interchange categories.

Use network tokens instead of static card details

Card networks typically charge less to process a token than a standard card number, while tokenization can also help improve authorization rates.

These savings come from changing how individual transactions qualify for cost, rather than simply negotiating a lower headline rate. A payment provider should help you optimize these underlying factors, not just offer a cheaper fee. Learn more in our report.

Adyen is a financial technology platform providing merchant services to enterprises including Uber, Spotify, eBay, and Hilton. We have full banking licenses across Europe, the UK, and the US and principal membership of Visa and Mastercard in major markets. We processed €1.39 trillion in volume last year. Here’s how our approach can help businesses better manage the total cost of credit card processing:

Cut cross-border fees with local acquiring across 45 markets

Domestic transactions are typically 59% cheaper than cross-border. With local acquiring licenses across 45 markets, transactions can be processed domestically rather than routed cross-border or managed through multiple local providers and entities.

"Adyen helped us with local acquiring in the US, which had a positive effect. We were able to reduce our bank declines by 21%."

Dennis Friemerding, Team Lead Payments at Flixbus.

Accept over 200 payment methods through one integration

Adding local payment methods alongside cards saves an average of 49% per transaction on scheme fees. Adyen supports more than 200 payment methods through a single integration, helping businesses offer customers their preferred ways to pay without managing separate contracts for each one.

Lower cost per transaction with payment intelligence

A fixed routing path, missing scheme data, or static card number can all push a transaction toward a higher fee or a higher chance of decline. We optimize individual transactions to address these factors by:

• Dynamically selecting the network with the best rate and the highest approval odds, cutting costs by 26%.

• Passing enhanced scheme data to the schemes to qualify eligible transactions, lowering interchange by up to 1%.

• Replacing static card numbers with network tokens, which schemes typically charge less to process and can increase authorization by 6%.

Reduce the costs that never show up as a fee line

Processing fees aren't the only costs associated with payments. Multiple integrations and unmanaged fraud risk can create operational costs that won't necessarily appear on your processing statement. Our single platform and fraud tools work to reduce these costs. A commissioned Forrester Consulting study found:

• 75% lower operational headcount to launch new markets*

• 27% fewer chargeback write-offs

• 40% fewer false declines on average*

*Results are based on a commissioned study conducted by Forrester Consulting on behalf of Adyen.

''Without Adyen, we would have had to hire more payment experts.''

Natasha Belinska,

Daniel Wellington

Credit card processing costs have several layers, and most aren't directly controlled by your payment provider. Understanding which costs are fixed – and which can be influenced – changes the question from “what's your rate?” to “what does this transaction actually cost end to end, and where can we make it more efficient?”

*In Singapore, payment services are provided by Adyen Singapore Pte. Ltd., which is licensed by the Monetary Authority of Singapore as a Major Payment Institution under the Payment Services Act 2019. Adyen Singapore Pte. Ltd. is not a bank and does not hold a banking license in Singapore.