Merchants Paid Record $198 Billion in Card Fees; Markups are Negotiable

U.S. merchants paid a record $198.25 billion in credit and debit card processing fees in 2025, marking a 219% increase from 2009. For many businesses, card acceptance has become the largest operating expense after labor, driven by a significant rise in overall transaction volume.

However, the core interchange rates set by card networks like Visa and Mastercard have seen minimal increases over the same period. For instance, Mastercard's highest interchange rate has only risen by five basis points in 17 years. The substantial growth in total merchant fees is largely attributable to processors' markups and additional fees layered on top of the interchange rates.

These processor markups can significantly inflate costs. While a competitive markup might be as low as 0.02% to 0.05%, common markups range from 0.15% to 0.90%. For a business processing $2 million annually, the difference between a 0.50% and a 0.05% markup amounts to $9,000 per year, excluding other potential junk fees.

To navigate these costs, merchants are advised to ask five critical questions and obtain written, signed answers from their credit card processor before signing a contract. Key questions focus on whether rates are fixed, if markups are clearly itemized separately from interchange, and the terms and conditions for terminating the agreement, aiming to uncover hidden costs and secure favorable terms.