U.S. merchants paid a record $198.25 billion in Visa and Mastercard processing fees in 2025, according to the Merchants Payments Coalition. For a mid-market company running tens of millions of dollars through card payments, that national trend shows up as one line item that keeps climbing with little explanation.
The answer to why any given credit card processing fee might be higher than it should be: it is really multiple charges stacked together, governed by an ever-changing rate book, and influenced by several entities. Interchange is the fee set by Visa and Mastercard and paid to the bank that issued the card. Assessments are paid to the card networks, and then the processor adds its own set of fees and markups. Interchange is the largest of the three, and the amount a business pays is driven less by the rate a processor quotes and more by how the merchant account is configured and how transaction data is submitted.
| Charge | Who sets it | Who gets paid | Typical size | Can you negotiate it? |
|---|---|---|---|---|
| Interchange | Visa, Mastercard and the other card networks | The bank that issued the customer's card | The largest share, and most of the roughly 2.35% average effective rate | Not the rate itself, but which rate applies can change with account setup and data |
| Assessments | The card networks | The card networks | Small and fixed, about 0.14% to 0.165% per transaction | No |
| Processor markup | Your payment processor | Your payment processor | Varies by pricing model, usually a small percentage plus a per-transaction fee | Yes, this is the negotiable slice |
Figures reflect published payment industry benchmarks; interchange and assessment rates are set by the card networks.
Can my processing fees be negotiated?
Some of them can be negotiated, but not the ones that matter most.
The topline rate is fixed, but which rates apply is not. Visa and Mastercard publish hundreds of interchange categories, and a single sale can land in a cheaper or a more expensive one based on the card type, the merchant category code, and the data submitted with the transaction. The gap between the category a sale qualifies for and the one it lands in is the overcharge, or downgrade.
Verisave, a merchant account optimization firm, traces most overcharges to four causes: incorrect account setup, transaction misclassification, improperly applied discounts, and broken data flows between the gateway, the ERP and the processor. None of these show up as an obvious error on a statement.
Why your quoted rates are not your real rates
The number a business should watch is its overall effective rate: total fees divided by total card volume. It captures everything, the interchange, the assessments, the markup and every incidental fee, in one figure.
Most finance teams know the rate on their contract. Far fewer know their effective rate, and fewer still know what their transaction profile should qualify for. In Verisave's polling of tens of thousands of finance professionals, 92% rated their ability to read their own statement as poor to moderate, and 66% said they were not confident they pay the lowest possible processing fees. About half reported rates that went up without explanation. When the people paying the invoices cannot read the bill, overcharges persist because no one is positioned to catch them.
The B2B trap: Level 2, Level 3 and commercial card data
Businesses that accept commercial, corporate, purchasing, or government cards face a sharper version of the problem. These card types qualify for lower interchange when the sale carries extra detail, known as Level 2 and Level 3 data. Passing that data can cut interchange by roughly 0.6% at Level 2 and up to 0.9% at Level 3 on qualifying transactions. Consumer cards do not qualify, no matter what data is sent.
The catch is unforgiving as missing a single required field downgrades the entire transaction to the highest rate. A company can believe it is capturing the discount while most of its commercial card volume falls back to Level 1 pricing.
Visa's Commercial Enhanced Data Program (CEDP) has raised the stakes by changing how Level 2 and Level 3 discounts are earned, and it subjects the underlying data to AI-assisted audits. Visa sunsetted most commercial and small business Level 2 interchange programs on April 17, 2026, which reshaped what many B2B merchants pay. Businesses whose data is not compliant stand to lose the discounts they have been earning.
Why switching processors rarely fixes it
When the bill climbs, the common reaction is to shop for a lower rate or change providers. That touches only the markup, the smallest slice of the fee mix and the one that is already the most competitive. It leaves interchange, the largest cost, exactly where it was, and it adds the disruption of moving accounts, re-integrating systems, and retraining staff.
The larger savings sit in the interchange layers of the account a business already has. Verisave works on the back end of that existing account, alongside the current processor, and reports overall fee reductions of 10% to 30% with no processor switch and no change to how a company sells. Think of it as having a mechanic tune the engine already under the hood, rather than buying a new car.
How to tell if you are overpaying
A finance team can start without any outside help. Calculate the effective rate for the last few months and watch how it moves:
- Scan the statement for downgrade or non-qualified line items, which signal transactions that missed a lower interchange category.
- If the business takes commercial cards, confirm whether those sales pass Level 2 and Level 3 data or fall back to Level 1.
- Compare the effective rate against what the specific card mix and sales channels should support, not against a single national average.
That review shows the gap between what a business pays and what its transaction profile should qualify for. Verisave built its model around closing that gap. Over 25 years it has recovered more than $610 million in unnecessary fees for clients across every industry, typically with most savings active within about 10 weeks, on a gain-share model with no upfront cost. The complimentary merchant account analysis produces the same effective-rate and downgrade picture a team can start on its own, backed by benchmarking data.
Frequently asked questions
How much can optimizing interchange actually save?
Depending on the card mix and how the account is set up, Verisave reports overall fee reductions of 10% to 30%, achieved on the back end of a company's existing merchant account with no processor switch.
What is a good effective rate?
It depends on your industry, card mix and sales channels, so a single benchmark can mislead. A better test is whether your effective rate matches what your specific transaction profile should qualify for. Many B2B merchants pay more than they need to because their commercial cards are not passing Level 2 or Level 3 data.
Why did my processing fees go up?
Card networks update interchange rates and rules every April and October, so some increases are scheduled. Others come from a shift in your card mix, transactions getting downgraded to higher categories, or account settings that no longer match how you sell.
Can I lower my fees without switching processors?
Yes. Most cost reduction lives in interchange optimization on the back end of your existing account, which does not require changing processors or disrupting operations. Switching addresses only the markup and adds integration work.
The number worth checking
Processing fees look high for a reason that is rarely the rate on the contract. It is the interchange underneath it, shaped by account configuration and transaction data most finance teams never see, and processors are not equipped to maintain.
A merchant account analysis puts a figure on the gap between what a business pays and what it should. That is the number worth checking before the next April or October rate cycle moves the bill again.
About Verisave: Verisave is a merchant account cost-reduction firm specializing in credit card processing fee reduction. Working independently of processors, Verisave reviews and re-optimizes the back end of a company's existing merchant account to eliminate overcharges caused by setup errors, transaction misclassification and broken data flows, addressing every component of processing fees including interchange and card association fees. Over 25 years, Verisave has recovered more than $610 million in unnecessary fees for clients across all industries, typically reducing fees 10% to 30% with no upfront cost.
