What Is a Good Credit Card Processing Rate?

January 3, 2021

Credit card processing rates can be a confusing topic for many business owners. What is a reasonable credit card processing rate? How do you know what your best option is? There are so many different opinions out there, and what works best for one business might not work well for another. This blog post will map out reasonable credit card processing rates. 

What Is Credit Card Processing Rate? 

A credit card processing rate is what you pay to a third-party company for each transaction that takes place. The transaction cost depends on the type of business and what industry your business falls into, along with other factors such as average ticket size or whether or not the customer uses a rewards program. A reasonable credit card processing rate is usually around two to three percent of the purchase price. Moreover, the credit card processing rates will also vary depending on what type of merchant account you have. The two most common types of merchant accounts are qualified and non-qualified. 

  1. Qualified Merchant Account 

It has been approved by the card brands to accept payments via their cards. For example, a business that accepts in-person payments using a card reader or swiper will likely have a qualified account. These funds typically offer lower processing rates since they meet the requirements set by the card brands. 

  1. Non-qualified Merchant Account 

Usually has higher rates, they typically go hand in hand with credit card processing for businesses whose transactions do not meet the requirements. This type of merchant account is best suited for businesses with low average tickets or offer high-risk products, such as those that sell firearms, tobacco, or adult products. 

Benefits of Credit Card for Your Business 

There are many benefits to accepting credit cards for your business. Below are some of the most popular reasons: 

  • Increased Sales: Studies have shown that businesses that accept credit cards see a significant increase in sales. It is because customers are more likely to purchase items when they can use their cards instead of carrying around cash.  
  • Greater Customer Loyalty: When customers can use their preferred payment method, they are more likely to return in the future and be loyal to your business. Using a card is often seen as being more convenient than paying with cash. 
  • Improved Cash Flow: Credit card payments are typically processed much faster than payments made with cash or check. This means you will receive the money from those sales sooner, which can help improve your business's cash flow. 
  • Protection Against Fraud: Credit card processing comes with several built-in security features that can help protect your business against fraudulent transactions. It can save you time and money in the long run. 
  • Tax Deductions: If you use a credit card processing service as a business expense, you may be able to deduct that cost from your taxable income. This can save you quite a bit of money at tax time. 

What is a reasonable rate when looking for the best credit card processing rate? It just depends on your business. The best way to determine what you should be paying for credit card processing rates is to do some research and speak with different processors and check out the industry average pricing by doing an internet search. It will help give you an idea of what other businesses in similar situations pay. 

What Credit Card Processing Fees Include 

Each transaction's credit card processing fee (also known as your merchant discount rate) is shared among the banking institutions that permit payments. They are as follows: 

  • Interchange Fee: This fee, which Visa and Mastercard set, pays for the cost of card acceptance. It's what helps maintain the banking infrastructure that allows payments to be made worldwide. 
  • Assessment Fee: This fee goes to the card brand (Visa or Mastercard), and it covers marketing and administrative costs associated with running a credit card system. 
  • Processor fee: This fee goes to the credit card processor, ensuring that you get what you pay for. The processing company manages all aspects of your merchant account, such as setting up an internet gateway service, managing equipment and software, etc. 

How Can You Lower Credit Card Fees? 

Accept cards in-person whenever feasible. The increased processing fees for online, keyed-in, invoicing, or mail-order transactions are due to the higher risk of fraud associated with these sales. The best way to avoid these fees is to accept cards in person when possible since this dramatically reduces the risk of fraud. 

Reduce the possibility of chargebacks. Banks may consider you a higher risk and raise your processing fees if you receive a significant volume of refunds. In addition, your risk of chargebacks will increase if you sell products that are quickly returned or have a low-profit margin. 

Set a minimum amount for credit card purchases. You can reduce your processing fees by setting a minimum amount for credit card transactions. For example, if you set the minimum at $25, customers will only be able to use their cards for larger purchases. 

Accept payments with BNG Payments. BNG Payment's credit card processing costs are transparent and straightforward. We don't charge any monthly fees or cancellation charges, and the only fee that applies is our low processing rate. You can easily compare what BNG Payments can do for your business when you inquire with us. 

General Guidelines for Comparing Processing Rates for Your Business 

What is a reasonable credit card processing rate? It is difficult to answer because it depends on so many factors. However, we can give you some general guidelines to follow when looking for good processing rates for your business. 

  • Look for a processor that offers interchange-plus pricing. 
  • Look at what they charge per transaction and what your average ticket is, as well as whether or not a customer uses a rewards program. You will also want to compare those rates with what other processors are offering in the market. 
  • Ensure that you have looked over all of the costs associated with the merchant account, such as PCI compliance fees and statement fees. 
  • Ask your current processor what rates they are offering you. If you're not happy with what they are currently charging you, it might be time to start shopping around for a new provider. 

Credit card processing rates might be complex, but understanding how they work and the benefits to your business, you can make an informed choice that best meets your needs. 

When looking for a good credit card processing rate, it's crucial to consider the different factors that will affect the pricing. 


Searching for what is a reasonable credit card processing rate can be overwhelming. Compare what they charge per transaction and your average ticket and whether or not a customer uses a rewards program. It's also important to look at what other processors are offering in the market before deciding what will work best for you. Fortunately, we've compiled some general guidelines to help you find the best rates and providers for your business.  

Lastly, make sure that you have looked over all of the costs associated with merchant accounts, such as PCI compliance fees and statement fees, when comparing pricing to avoid any surprises later on down the line. We hope that this post has helped you explore what might work well for your business. If you are still having trouble deciding which option is right for you, please feel free to reach out to BNG Payments at 888-777-5659. Our experts will help guide you through all available options. Thank you.