What is Transaction Fee | chargebackhit.com

Transaction Fee


Transaction fees are charges imposed on businesses by their payment service provider each time they process an electronic payment for either a Card Present or Card Not Present transaction.

These fees can vary slightly depending on the payment service provider but typically range from 0.5% to 5% of the transaction’s value. Additionally, fixed fees may be attached to transactions. As a result, smaller merchants often set a minimum purchase value (e.g., £5) for card or electronic payments to avoid absorbing fees for smaller transactions due to their slim margins.

A transaction fee comprises an acquirer fee and a processor’s fee. Besides transaction fees, merchants might incur other fees while processing transactions.

Gaining insights into various transaction fees promotes transparency in your operational expenses. Your payment service provider typically sends a monthly merchant account statement outlining the fees you have incurred.

Providers employ diverse fee structures and charges, and you are likely to encounter the following common types:

  • Interchange fees
  • Terminal fees
  • Tiered fees
  • Subscription fees
  • International transaction fees