Understanding payment processing fees isn’t just about knowing what you’re paying. It’s about understanding why you’re paying it, and whether there’s a better way.
You may have noticed I’ve been on a bit of a payment fee tangent lately. I have, and for good reason. Merchants shouldn’t have to wonder whether the fees they’re paying are fair, transparent, and competitive.
When processors generate billions in gross profit, it’s worth asking how much of that comes from merchants who never question what they’re paying.
In 2024, Block’s Square segment generated approximately $3.6 billion in gross profit. That figure reflects the broader Square business, not payment processing alone. But it raises an important question about the economics of payment processing and the pricing models merchants accept.
Where does the opportunity for merchants to save come from?
The gap between what processing costs and what you’re charged.
Flat-rate pricing makes that gap difficult to see because you pay a set rate regardless of the underlying cost of each transaction.
Consider a $500 online debit card transaction in the US, using a hypothetical flat rate of 2.9% + $0.30.
→ Your processing fee: $14.80
→ Regulated debit interchange: Up to approximately $0.47 for a qualifying transaction subject to the federal cap, including the permitted fraud-prevention adjustment.
That’s a significant difference before accounting for the processor’s other costs.
Interchange is only one component of processing costs, and the federal cap applies to qualifying transactions involving covered issuers. It doesn’t apply to every debit card. But underlying transaction costs can vary significantly, while a flat rate can leave merchants paying the same price regardless.
The same question applies across the industry. Whether you work with a major processor or a familiar payment platform, simplicity alone doesn’t guarantee competitive pricing.
Flat-rate pricing has its place. But convenience and cost-effectiveness aren’t the same thing.
Your processing fees deserve the same scrutiny as every other operating expense. Yet they rarely get it.
We help businesses understand their processing costs, evaluate their payment arrangements, and identify opportunities to reduce unnecessary expenses.
If you haven’t reviewed your statement recently, it may be time to find out what your current pricing is really costing you. Reach out to Cartis Payments, and let’s identify where you’re overpaying and what you could be saving.