Payment Hub

InterPayments: How to Avoid Credit Card Processing Fees

Updated   |  5 min read

How can you be competitive with your prices and still realize a profit? It's a question that every eCommerce business must answer daily. You want prices to be as low as possible to draw customers in, but the business may fail if costs are too high and books are in the red.

Interpayments helps reduce credit card fees from payment providers.

They're Stealing Your Profit

Whether you're bulk purchasing for resale or manufacturing to create items from scratch, you want to see as much profit as possible with every transaction.

Unfortunately, payment processing transfers often take a sizable chunk of profit, especially if you sell on razor-thin margins. With the average credit card processing taking an average of 2.9% of the transaction, losing that much profit can force you to raise prices...and maybe lose you customers.

So, here's the question. What can be done to avoid the credit card transaction fees and the payment providers that are eating your profits?

How Bad Are Credit Card Fees?

Here's a sad reminder that we'd all rather ignore: your current credit card processors are taking between 2% and 4% of the gross transactions, not net. That means they're not only taking away from your profit, but they're effectively increasing the price you paid for the item in the first place.

Businesses in the United States pay more than $90 billion dollars a year in card processing fees, which is $90 billion lost. If you feel sick every time you see the difference between what the customer paid you and how much money actually reaches your coffers, InterPayment's solution might be what you're looking for ways to save money with payment providers.

If you're like most business owners, you want to be done with credit card processing costs—the flat fee, the flat monthly fee, the interchange fee, the per transaction fee—that are eating into your profits.

Payment software vendors like InterPayments can help reduce high credit card fees
InterPayments can accept payments and reduce high credit card fees.

Avoiding Transaction Fees

The credit card industry has done a very good job of convincing companies that giving up 3% of their profits “is just the cost of doing business.” These are the same credit card companies that are making money from both you and their cardholders.

Businesses of every size are, understandably, looking for ways to offset card fees associated with processing credit card payments when they accept cards. Unfortunately, the options of other payment services aren't always viable.

  • Only take cash – This might work for a seasonal ice cream stand or tattoo parlor, but it's completely impossible for eCommerce businesses.
  • Only take alternate electronic payments – Payment options can be great for companies taking large orders in B2B transactions, but it's not possible for eCommerce businesses selling B2C. Most customers who would be inclined to swipe a credit card don't even know what ACH is. If you do start selling business-to-business, you can take advantage of a B2B payment gateway.
  • Only take debit cards – This might seem like a good compromise, but it's just going to confuse customers at POS transactions. Many people are also reticent to use debit cards online because they offer less fraud protection than credit cards do.

If the above won't work for you, how can you offset the cost of fees when you accept credit cards?

The amount a business pays to a credit card company is variously known as “interchange fees,” “swipe fees,” and “credit card processing fees.” Some payment software vendors can help you avoid them all.

How InterPayments Works

InterPayments works with your payment hub, payment processor, or payment gateway to pass the cost of credit card processing fees to your customers. This surcharge is automatically calculated by InterPayments and is very transparent to the customer as a line item. The information is shown along with any taxes, shipping, or other charges.

Here's how it works. InterPayments will first check to see if the card information identifies it as a debit or credit card. If it's a debit card, the surcharge is not added. If it's a credit card, the surcharge—which can legally be up to 4% in most states—is added to the total. You'd be collecting $3.00 on a $100 order, which offsets your credit card transaction fees.

InterPayments beats payment providers to accept credit cards and be a sales tax engine

Debit cards don't come with processing or interchange fees as credit cards do, and it is illegal to add this surcharge if a customer is using a debit card or prepaid debit card (even if that card is issued by one of the “big four” credit card companies).

Customize to Your Needs

There are many places where you'll want to—or be legally required to—customize InterPayments. Fortunately, the tech makes it easy to set up so that it happens automatically when you need it to (while still allowing manual overrides). Why are customizations so important?

InternPayments can help recover processing fees when you accept credit cards
  • Specific Customer Complaints – Customers are accustomed to businesses eating credit card processing fees, erroneously thinking that “3% will hurt me, but it won't hurt big business.” Whether you're big or not, that 2% to 4% you're paying can destroy thin profits. Still, you don't want to lose customers; if a customer complains, the credit card processing fee can be removed from individual transactions.
  • Special Customers – You can remove the InterPayments surcharge for specific customers. Manual overrides can be made for friends or family members. You may also choose to waive the fee on an initial order from a big customer that you're wooing, with the agreement the fee will apply next time.
  • State Restrictions – In the United States, approximately ten states have restrictions or bans on surcharge fees for credit card transactions. InterPayments can automatically remove the surcharge if you're doing business in one of those states.
  • By Card – Credit card transaction fees range from about 2% to 4%. That could recoup too little to cover some cards, or it could be so much as to seem unpalatable to your customers. Every brand of card, and even individual program cards, can be customized to specific percentages.
Accept credit cards and keep your existing payment process with InterPayments.

Working with Clarity Ventures and InterPayments

Clarity has partnered with InterPayments to help SMB and enterprise-level businesses offset credit card processing fees that can obliterate profit margins, freeing up that money to help them expand. Clarity's Payment Hub works seamlessly with InterPayments and any ERP, CRM, EMR, or even custom back-office software, all while keeping top-tier security with PCI-DSS compliance.

Payment Hub works seamlessly with InterPayments and any ERP, CRM, EMR, or even custom back-office software, all while keeping top-tier security with PCI-DSS compliance.

You can learn more by watching the video above, but we'd love to show you a demo of how it would specifically work for your business. Looking for a quote? We're happy to give you one. And if you're thinking about ways to save money, we're here to help, so get in touch with us today for any custom eCommerce solutions you may need.


Recover Processing Fees with InterPayments

Schedule a free, no-obligation discovery session with our subject matter experts to see what InterPayments and Clarity Payment Hub can do for you. We'll help you take your existing payment process and avoid high credit card fees.

Payment providers like InterPayments can help reduce credit card fees.



Credit card processing fees refer to the charges incurred by merchants when they accept credit payments from customers. Processing fees cover the costs associated with processing transactions and maintaining the necessary infrastructure for electronic payments. They typically include interchange fees (paid to the card-issuing bank), assessment fees (collected by card networks like Visa or Mastercard), and a markup from the merchant service provider.

  • Interchange fees are set by the card networks and vary based on factors like the type of card used and the nature of the transaction.
  • Assessment fees are a percentage of the transaction value and go to the card network.
  • The merchant service provider adds their own markup, which can be a fixed fee or a percentage of the transaction amount.

While credit card processors need to make money for enabling electronic payments, the per-transaction fee can impact the profitability of business owners, making them look for ways to lower credit card processing fees. Businesses often consider them when setting prices or deciding which payment methods to accept. Understanding and managing these processing fees is crucial for maintaining a healthy financial bottom line.


Credit card companies charge merchants a combination of fees for processing transactions. This includes interchange fees, assessment fees, and a markup from the merchant service provider. Interchange fees are set by the card networks (like Visa or Mastercard) and vary depending on factors such as the type of card used and the nature of the transaction. They typically range from around 1.5% to 4% of the transaction amount.

Assessment fees are paid directly to the card networks and are typically around 0.13% of the transaction value. The merchant service provider adds their own markup, which can vary widely and may include a flat fee or a percentage of the transaction amount.

Overall, the total fees can range from 2% to 5% or more of the transaction value. It's important for merchants to be aware of these costs and factor them into their pricing strategies to ensure profitability.


Credit card processing involves a series of steps to facilitate electronic transactions between a customer, a merchant, and financial institutions so that the merchant can accept payments. When a customer makes a purchase using a credit card, the process begins with the merchant swiping, dipping, or manually entering the card information into a point-of-sale (POS) terminal.

The transaction details, including the card number, purchase amount, and merchant information, are encrypted and sent to the payment processor. The payment processor forwards this information to the card network (such as Visa, MasterCard, American Express, or other credit card networks), which verifies the transaction and checks for available credit on the customer's account.

Next, the payment network sends an authorization code or decline message back to the credit card processing company, which then relays the information to the merchant's POS terminal. If the transaction is authorized, the customer's funds are reserved, and the sale is completed.

At the end of the day, the merchant batches all authorized transactions and submits them to their acquiring bank, which acts as an intermediary between the merchant and the card networks. The acquiring bank forwards the batch to the card networks, which distribute the funds to the issuing bank (the customer's bank). The issuing bank then transfers the appropriate amount from the customer's account to the merchant's account, completing the credit card processing cycle.

Throughout this process, security measures such as encryption and authentication protocols ensure the confidentiality and integrity of the transaction data, safeguarding sensitive information from unauthorized access to credit and debit cards.

Credit card processing fees are an aspect of accepting credit cards that merchants must always be aware of. Both the credit card processor and the credit card company may levy fees on the merchant—payment processing fees, incidental fees, cancellation fees, and even monthly fees—which can wear away at a merchant's profits. That's why so many merchants that accept credit card payments are look for a way to eliminate processing fees.


Credit and debit card transactions differ primarily in how they access funds and manage payments. A credit card allows users to borrow money up to a predetermined credit limit. When a credit card is used for a transaction, the cardholder is essentially borrowing money from the credit card issuer via a third-part credit card processor. The borrowed amount needs to be repaid, often on a monthly basis, and interest may accrue on any outstanding balance. Credit card processing fees are incurred by the merchant.

On the other hand, a debit card is linked directly to the cardholder's bank account. When a debit card is used, the purchase amount is immediately deducted from the available funds in the associated bank account. There is no borrowing involved, and users can only spend the amount available in their account. In this case, payment processing is not involved.

Basically, credit cards involve borrowing money with the obligation to repay, and credit card processors get involved to levy fees. Debit cards, however, provide direct access to the user's own funds, and transactions are limited to the available balance in the linked bank account.


Credit card processors offer essential services to the payment card industry to facilitate electronic payment transactions between merchants and customers. The primary service they provide is handling authorization, where the processor verifies the validity of a credit card transaction and checks for available credit.

They also handle the clearing process, managing the exchange of transaction details between the merchant and the cardholder's bank. Settlement services involve the actual transfer of funds from the customer's bank to the merchant's account. They also provide address verification service and handle card present transactions/card not present transactions.

These payment service providers also play a crucial role in ensuring security through encryption and fraud detection measures. They provide merchants with the necessary hardware and software for point-of-sale terminals, online payment gateways, and other tools to accept credit card payments.

Credit card processors streamline the payment process, manage financial transactions, and enhance security to create a seamless experience for both businesses and consumers.


To accept credit cards and recover processing fees, businesses can incorporate the cost of credit card processing into their pricing strategy. Here's a concise approach of how to accept credit cards and use payment providers to alter your existing payment process:

Businesses can recover credit card processing fees by implementing a surcharge or convenience fee for customers who choose to pay with a credit card. This fee covers the cost incurred by the business for processing the transaction. It's essential to comply with legal requirements and card network regulations when applying surcharges. Alternatively, businesses can adjust their product or service pricing to account for credit card processing costs across all transactions, ensuring these costs are factored into overall pricing structures.

Communicating these adjustments transparently to customers is crucial for maintaining trust and complying with regulations, especially when there's any change to credit card payment options. By integrating processing fees into pricing strategies, businesses can offer credit card payment options while mitigating the impact of processing expenses on their bottom line.

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Stephen Beer is a Content Writer at Clarity Ventures and has written about various tech industries for nearly a decade. He is determined to demystify HIPAA, integration, enterpise SEO, and eCommerce with easy-to-read, easy-to-understand articles to help businesses make the best decisions.