Credit card processing fees for small businesses in the US: what you pay and how much margin they take

The big flat-rate providers charge US shops 2.29% to 2.7% plus 5¢ to 15¢ for each in-person card payment: Square 2.6% + 15¢ on its free plan, Stripe Terminal 2.7% + 5¢, PayPal 2.29% + 9¢, and Clover 2.3% to 2.6% + 10¢, depending on the plan. On these plans a debit card costs the same as a credit card. The fee comes out of your gross profit: on an item you sell for $25 that cost you $15, Square's 80¢ fee takes 8% of your $10 margin.

The rest of this guide uses the same numbers to show what each way of paying costs, what sales tax does to the fee, what a month of fees adds up to, why your deposits come in under your sales, where you can add a surcharge, and how to find the rate you're really paying.

What do card payments cost a small shop in the US?

These are the rates providers published as of October 2026. Flat-rate plans charge one price for every card. Merchant accounts from banks and processors, often on interchange-plus or tiered pricing, pass on what the card networks charge for each type of card plus a markup, and their prices aren't published: your merchant agreement and statements are what count.

Plan and hardware fees count too. Clover's Retail Standard plan, which gets the 2.3% rate, costs $84.95 a month; on $10,000 of card sales that adds 0.85%. Square Plus lowers the rate by 0.1 point for $49 a month, so on fees alone it pays for itself only above $49,000 a month in card sales.

Processing fees come out of your margin, not your sales

A 2.6% fee sounds small because it's measured against the sale. But your shop runs on what's left after the cost of the goods, and that's where the fee comes from.

Take an item you sell for $25 before sales tax that costs you $15. Your gross profit is $10, a 40% margin:

The last row comes from one formula: fee as a share of gross profit = fee rate ÷ gross margin. Count the fixed fee as part of the rate: 15¢ on a $25 sale is 0.6%, so Square's all-in rate here is 3.2%, and 3.2% ÷ 40% = 8%. The thinner your margin, the bigger the bite:

A convenience store working on a 20% margin gives up 15% of its gross profit to a 3% all-in fee. A gift shop or clothing store on 50% to 60% feels less than half of that.

The fixed fee weighs most on small sales. Square's 2.6% + 15¢ is 5.6% of a $5 coffee and 2.9% of a $50 sale; Stripe's 2.7% + 5¢ is 3.7% and 2.8%. If most of your sales are small, compare providers at your average sale, not the headline percentage.

Your fee is charged on the sales tax too

A percentage fee applies to the whole card payment, and that includes the sales tax. Square spells it out: its fee is taken from the total of each transaction, tax and tip included. You pass the sales tax on to the state, but the fee on it is yours to pay.

With 8% sales tax, the $25 item rings up at $27. Square's 2.6% + 15¢ on that is 85¢, which is 3.4% of the $25 you keep and 8.5% of your $10 margin rather than 8%. To get the real cost, multiply the percentage part of your rate by 1 plus your sales tax rate: 2.6% × 1.08 at 8%.

Illinois passed a law that would stop interchange being charged on the sales tax and tip of a card payment, but it isn't due to take effect until July 1, 2027. A federal court has blocked it for national banks, federal credit unions, out-of-state banks and the card networks, and appeals are under way.

What a month of fees looks like

A month of fees isn't one rate times your sales. Each payment method has its own price, cash costs nothing, and the fixed fee on every payment adds up. Here's a shop on Square's free plan that takes $30,000 in a month:

That's about 2.8% of what customers paid, or roughly $10,200 a year, and the 15¢ per card payment alone is $123.75 of it. Afterpay and cards from abroad are under 7% of this shop's sales but about an eighth of its fees. Put in your own sales and rates to get your number.

Why your deposits are smaller than your sales

Your POS records what the customer paid. Your processor deposits what's left after its fee, so your bank statement never matches your sales, and the gap is your processing fees.

• Record sales at the full amount the customer paid, and record processing fees as a separate expense. Your sales figures then stay right when customers switch between cash and cards, and they line up with the gross amount on your Form 1099-K.
• Square takes its fee out before it pays you. Standard transfers arrive the next business day at no charge; instant and same-day transfers cost 1.95% of the amount. On next-business-day transfers, Square keeps Friday's transfer in your balance over the weekend by default, and it arrives by Monday. Stripe pays out US accounts two business days after a payment, and your first payout usually takes 7 to 14 days.
• A refund doesn't give the fee back. Square and Stripe both keep the processing fee on the original payment when you refund it (canceling a Stripe payment before it completes costs nothing). On a bank merchant account, check your agreement.
• Disputes: Square charges no chargeback fee. Stripe charges $15 for each dispute you receive, plus another $15 if you contest it yourself, which you get back if you win.

Can you add a surcharge for credit card payments?

In most states, yes, on credit cards only. Visa's rules cap a surcharge at 3% or what the card costs you to accept, whichever is lower. You must tell your processor at least 30 days before you start, post a notice at the store entrance and at the register, and show the surcharge as a separate line on every receipt.

Debit and prepaid cards can't be surcharged at all, even when the customer picks “credit” on the terminal: that choice only switches between signing and entering a PIN, and the card is still a debit card.

State law comes first. Connecticut, Maine and Massachusetts ban card surcharges, and so does Puerto Rico. Other states allow them with extra conditions. Oklahoma replaced its ban in November 2025 with a cap of 2% or your actual processing cost, whichever is lower, and no surcharge at all if you only take cards. Minnesota caps a surcharge at 5% and requires you to tell the customer out loud as well as on a posted sign. Colorado, New Jersey and New York have their own rules too. In California, the attorney general's guidance on the state's hidden-fees law says a card fee that customers can avoid by paying another way can stay out of your advertised prices, but if you only take cards, the fee has to be in the price.

If you do surcharge, check whether your state taxes it. Texas and Washington, for example, treat a card fee you pass on to customers on a taxable sale as part of the taxable sale price, even when it's listed separately on the receipt.

A cash discount is the other route. Visa allows it when each item shows the card price, or the card and cash prices side by side. A fee added at checkout for paying by card is a surcharge under Visa's rules, whatever you call it.

More change may be coming. In June 2026, a federal court gave preliminary approval to a settlement between Visa, Mastercard and merchants. If it wins final approval, merchants would get more room to surcharge and could choose not to accept premium and commercial credit cards, interchange on standard consumer credit cards would be capped at 1.25%, and the average credit interchange rate would come down by 0.1 percentage point for five years. Until then, today's rules apply.

The other way to recover card costs is your prices. If cards and phone wallets are 85% of what customers pay and cost about 3.2% all in, fees come to about 2.7% of your sales, so prices about 2.8% higher cover them.

Is a payment method worth accepting? Work out the break-even

A payment method costs you its fee and earns you the sales you'd lose without it. The break-even uses the same formula: the share of that method's sales that must be extra business = fee rate ÷ gross margin.

For cards on Square at 3.2% all in on a 40% margin, that's 8%. If one card customer in 12 would walk out or spend less without cards, taking them pays for itself. With cards making up two-thirds of US consumer payments, that's an easy call.

Afterpay is a closer call. At 6% + 30¢ on a $100 sale, the fee is 6.3%, and 6.3% ÷ 40% is about 16%: roughly one Afterpay sale in six has to be one you wouldn't otherwise have made, from a bigger basket or a customer who'd have left without it.

How do you find the rate you're really paying?

Your monthly statement has the real number: divide the month's total fees, including any monthly, terminal and statement fees, by your card sales. That's your effective rate. If your statement breaks fees out by card type, do it for each one and you'll see which cards cost you most.

Then compare it with a benchmark. Merchants paid an average of 2.35% on Visa and Mastercard credit card payments in 2024, according to the Nilson Report. That figure is for credit cards only, so set it against your credit card fees, not your all-card rate. If your sales top $250,000 a year, Square invites you to ask about custom pricing.

If a lot of your customers pay by debit, ask about interchange-plus pricing. On a flat rate, a debit card costs as much as a credit card. On interchange-plus you pay the card's actual interchange plus your processor's markup, and the Federal Reserve's Regulation II caps interchange on debit cards from banks and credit unions with $10 billion or more in assets at 21¢ + 0.05%, plus 1¢ for fraud prevention. The cap is being challenged in court, but it still applies. On a $25 sale that's at most about 23¢, against 80¢ for Square's whole fee, though network fees and the markup come on top. In 2024 those regulated debit payments carried 23¢ of interchange on average; exempt payments, mostly on debit cards from banks and credit unions with under $10 billion in assets, averaged 51¢.

Let your POS do the math

We found no federal or state rule that requires a certified cash register in the 50 states, so the POS you use is your choice. What the IRS does require is records that back up your tax return, generally kept for three years, and longer in some cases.

Puerto Rico is different. Besides banning surcharges, Hacienda requires merchants with more than $125,000 in annual sales to use a fiscal terminal at every point of sale, and a business authorized to charge the reduced sales tax rate on prepared food needs one whatever its sales. DingPOS is not a fiscal terminal and doesn't report to Hacienda. If that rule covers you, ring up your sales on your fiscal terminal and use its reports for the math in this guide.

If you run your counter on an iPad, DingPOS can estimate the fees for you. In Settings → Payment Methods, give each payment method its processing fee: a percentage, a fixed amount per transaction, or both (on Square's free plan, 2.6% and $0.15). Add Afterpay or EBT as separate methods if you take them, since their rates differ. DingPOS works out the fee on what the customer pays, sales tax included, just as your processor does, so enter the rate as your processor quotes it. Square and Stripe keep their fee on refunds, so turn off “Percentage fee returned on refunds”. The Payment Methods card on Stats then shows the estimated fee and net received for each method. DingPOS doesn't process payments or read your processor's statements, so these figures are estimates from the rates you enter, and your statement shows the actual amount.

Setup is covered in Can DingPOS track card and mobile payment fees?. Fee tracking is on the Standard plan and up (compare them on Pricing), and you can try everything free for 30 days.