Card payments and what they cost you

To work out what card payments cost, divide all processing fees by your card sales. Then decide whether to absorb that cost, include it in your prices, or offer another payment method. Check network and state rules before adding a surcharge.

For example, a 3% fee on an $8,500 payment is $255. That is the amount to compare with the cost and timing of collecting by check or ACH.

Your rate changes by payment channel

Flat-rate processors quote a headline number, but they charge differently depending on how the card reached you. Read the current schedule for the account you actually use; published rates and add-on fees change.

Compare all the channels you actually use. Do not apply an in-person headline rate to online or keyed transactions without checking the schedule.

The alternative model is interchange-plus. Interchange is a transfer fee between the acquiring and issuing banks, set under network schedules. It varies by transaction and card. On interchange-plus you pay that cost plus a disclosed markup; on flat rate you pay the same headline rate either way. Ask whether interchange-plus fits your mix once card volume is meaningful, and compare your own statements instead of assuming which card type is cheapest.

Your effective rate is a division problem

The number that matters is not on the rate card. It is total fees divided by total card volume, from your own statement. An illustrative monthly statement, using invented figures:

$558 ÷ $18,400 = 3.03%. The headline rate was 2.6%.

Fees that do not scale with volume — gateway, PCI, monthly minimums, terminal hardware or its lease — hurt most in a slow month. Run this division twice a year; a processor that reprices you shows up here.

Compare card fees with payment timing and risk

Cards can be worth the fee when they turn a payment into cleared money before it becomes a collection problem. Compare the fee with your own time, risk, and payment history rather than with a universal rule of thumb.

A customer can authorize a card payment at completion. Settlement still follows the processor’s schedule, and disputes or chargebacks can follow later. Compare that timing with the other payment methods you offer.

Percentage fees grow with the invoice. Compare these illustrative processing schedules with your actual fees, then consider whether check or ACH payments fit a larger job’s agreed draw schedule:

Passing the fee on is a state-by-state question

Whether you can add a credit-card surcharge depends on current network, processor, and state rules.

Card-network and acquirer rules set conditions on a surcharge, including required notices and disclosures. Do not surcharge debit or prepaid cards, even when the customer selects "credit." Visa’s surcharge FAQ explains its debit exclusion and disclosure requirements. Confirm the current rules for every card brand you accept with your processor before setting one up.

State law also matters. New York GBS 518, for example, requires the total credit-card price to be posted and limits the surcharge to the business’s card cost. Check the current rule for the state where you sell before adding a fee line.

A cash discount means posting a price and reducing it for cash or check. Do not relabel a percentage added at checkout as a "discount"; ask your processor and a local adviser how your intended pricing is treated. A convenience fee is a separate, narrower arrangement that needs the same care.

Absorb card fees, include them in prices, or offer other methods

Three approaches to compare:

Absorb it on small work. Compare the fee with the cost of following up on another payment method. Use your own time and payment history to decide.

Include processing costs in your prices. If cards are half your revenue at an effective 3%, processing costs about 1.5% of total revenue. Include that expense when calculating selling prices and check whether the resulting margin covers your costs.

Steer the big jobs. Card for the deposit, check or ACH for progress payments and the balance — written into the estimate so it is a term, not a refusal at the door. Confirm that the customer can use the methods you propose before agreeing the terms.

Save the selling prices you calculated

Save your calculated selling prices in the DoneQuote service catalog. New quote drafts can use those prices; review the selected lines, rates and total before sending. When you invoice in your accounting tool, use the approved quote and any approved changes as the supporting scope.

Your effective rate is total fees divided by card volume. If you plan to pass a cost to customers, confirm the current rule in your state and with your processor before you publish it.