Fee guide

Interchange fees

Interchange is the fee the card-issuing bank (the bank that issued the customer's credit or debit card) charges the merchant's bank for processing the transaction. It is the largest component of most processing fees.

Interchange rates are set by the card networks (Visa, Mastercard, Amex, Discover) and depend on:

• Card type: Rewards cards, corporate cards, and premium cards have higher interchange rates than basic cards.
• Transaction type: Card-present (swipe/dip/tap) transactions have lower rates than card-not-present (online/phone) transactions.
• Business category: Some merchant categories (e.g., charities, government) qualify for reduced rates.
• Transaction amount: Small transactions may have a flat fee instead of a percentage.

Interchange is typically a percentage of the transaction amount plus a flat fee — for example, 1.65% + 10¢ for a card-present debit transaction, or 2.50% + 10¢ for a card-not-present credit rewards transaction.

See also: Assessment fees, Understanding your fee schedule

Assessment fees

Assessment fees are charged by the card networks (Visa, Mastercard, Amex, Discover) to the processor for the use of their payment infrastructure. The processor passes this cost to the merchant.

Unlike interchange, which varies by card type, assessment fees are usually a flat percentage of total transaction volume, regardless of the card type. Typical rates:

• Visa: 0.14% of total volume
• Mastercard: 0.1375% of total volume
• Discover: 0.13% of total volume
• Amex: varies by agreement

Assessment fees are often included in the "interchange plus" pricing model. If your processor quotes a single blended rate (e.g., "2.9% + 30¢"), the assessment fee is included in that number.

See also: Interchange fees, Understanding your fee schedule

Chargeback fees

A chargeback occurs when a customer disputes a transaction and the card issuer reverses the payment. The merchant is typically charged a fee on top of the reversed amount.

Chargeback fees typically range from $15 to $100 per chargeback, depending on the processor and card network. They are charged regardless of whether the merchant wins the dispute.

Additional chargeback-related fees:

• Chargeback retrieval fee: For providing documentation to support a dispute.
• Chargeback representment fee: For submitting a rebuttal letter and evidence.
• Excessive chargeback penalty: If your chargeback ratio exceeds a threshold (typically 1% of transactions), you may be placed in a monitoring program with higher fees.

In a reconciliation, a chargeback appears as a line where the payout amount is refunded or reversed, and an additional fee is charged. The order is present in the payout report but with a negative amount or a chargeback indicator.

See also: Interchange fees (interchange is not refunded on chargebacks), Fee schedule

Currency conversion fees

When a transaction is processed in a currency different from the merchant's settlement currency, the processor converts the amount. This conversion carries a fee, typically 1% to 3% of the transaction amount, on top of the standard processing fees.

Currency conversion fees can appear in two scenarios:

• Cross-border transaction: A US customer buys from a US merchant using a card issued in the UK — the transaction is in USD but the card network converts from the customer's home currency.
• Multi-currency settlement: A merchant settles in USD but processes a transaction in EUR — the processor converts EUR to USD.

The fee is usually a percentage of the transaction amount, added after the interchange and assessment fees. Some processors include it in the quoted rate; others itemise it separately.

See also: Interchange fees (interchange still applies to the transaction amount before conversion)

Instant payout fees

Standard payouts from a processor to a merchant's bank account take 1–3 business days. "Instant" or "expedited" payouts — which settle within minutes or hours — carry an additional fee.

Typical instant payout fees:

• Flat fee per payout: $0.50 to $2.00 per instant payout, regardless of amount.
• Percentage fee: 1% to 1.5% of the payout amount, sometimes with a minimum and maximum fee.
• Some processors also charge a minimum fee (e.g., $0.50 minimum) and a maximum fee (e.g., $25.00 maximum).

In a reconciliation, instant payout fees appear as line items in the payout report that are not matched to any specific order. They are fees on the movement of funds, not on any individual transaction.

See also: Assessment fees (assessment is charged on the original transaction, not on the payout)

Monthly and periodic fees

Some processors charge recurring fees that are not tied to individual transactions. These appear in the payout report as deductions or separate line items.

Common periodic fees:

• Monthly statement fee: A flat fee ($5–$15) for paper or electronic statements.
• Monthly minimum fee: If your total processing fees for a month are below a threshold (e.g., $25), you are charged the difference.
• PCI compliance fee: A quarterly or annual fee for maintaining PCI DSS compliance.
• Annual fee: A flat fee charged once per year for the merchant account.
• Gateway fee: A monthly fee for using the processor's payment gateway.

In a reconciliation, these fees are not attributable to any individual order. They contribute to the gap between gross orders and the net deposited amount, and should be checked against the processor's published fee schedule.

See also: Understanding your fee schedule

Understanding your fee schedule

Your processor publishes a fee schedule — the document that lists what each type of transaction costs. There are two common pricing models:

Interchange-plus pricing

Your processor charges you exactly the interchange rate set by the card network, plus a markup. For example: "interchange + 0.30% + 10¢". This is transparent — when the reconciliation shows a fee that differs from the published schedule, it is visible as a markup above the network rate.

Blended/flat-rate pricing

Your processor charges a single rate for all transactions, regardless of card type. For example: "2.9% + 30¢". This is simpler but less transparent — the processor adjusts the markup to cover the average interchange cost, and you may overpay on low-interchange transactions.

When Recongap flags a "fee mismatch," it means the actual fee on the payout report does not match the expected fee derived from the published schedule. Check the fee schedule your processor provides to confirm whether the mismatch is an error or a legitimate adjustment.

Ready to reconcile? Upload your files and see exactly where your fees differ from the schedule.