What payment processing actually costs
You won't find a rate on this page, and that's deliberate. A real processing price depends on what you sell, how much you sell, and how a bank reads your risk. Anyone publishing a number before asking those questions is quoting you a lure, not a price. So here's the honest version: what the cost is made of, why a high-risk category changes it, and what to ask any processor before you sign with them.
What is a processing price actually made of?
Every card payment price, from an aggregator to a high-risk specialist, is built from the same parts. Once you can see the parts, you can compare two quotes that are dressed up to look nothing alike.
Interchange
The card networks set this, and it goes to the bank that issued your customer's card. Nobody negotiates it, and no processor discounts it. It moves with the card type, so a rewards credit card costs more to accept than a debit card.
Processor markup
What the processor keeps on top of interchange. This is the negotiable part, and it is the part a quote should show you plainly. When a price is quoted as one blended number, the markup is the thing being hidden inside it.
Monthly and per-transaction fees
Account fees, gateway fees, statement fees, batch fees, PCI fees and per-item charges. Individually small, collectively not. These are where surprises live, and they belong on the quote by name.
Hardware and software
Terminals, readers, scanners and the register software behind them. Bought outright, leased or bundled into the processing price. Leases in this industry are often the most expensive way to buy the cheapest device.
Risk terms
High-risk accounts can carry a reserve, a rolling reserve or chargeback fees. These are not line items on a rate sheet, but they affect your cash flow more than the rate does. Ask about them before you sign.
Your own risk profile
Your category, monthly volume, average ticket, chargeback history and how long you have been in business all move the price. Two CBD stores on the same block can get very different quotes for exactly these reasons.
Why does a high-risk category cost more?
Not because your business is worse. Because fewer banks will underwrite it, and the ones that do carry more work and more exposure to do it.
A hemp or CBD account gets reviewed by a person. Someone reads your lab reports, your labels, your product claims and your website. That review costs money and it takes time. On top of it, the sponsor bank is accepting the risk that a product rule changes, or that a regulator moves, or that your chargebacks climb. Fewer competing banks means less pressure on price.
The flip side is what you get: your own merchant ID, an account someone actually approved, and a processor who knew what you sold on the day they boarded you. That's the whole difference from an aggregator, and it's covered in what makes CBD high risk and how high-risk processing works.
How do interchange plus and flat rate compare?
Flat rate charges you the same way on every card. It's simple to read and it's the model the aggregators use. Interchange plus passes through the card networks' actual cost and adds a stated markup on top, so you can see what the processor is keeping.
Flat rate is easier. Interchange plus is more honest, because it separates the part nobody controls from the part you're actually negotiating. Which one costs you less depends on your volume and your card mix, and no page on the internet can answer that for your business without your statements in front of it.
What should you ask any processor before signing?
Ask us these. Ask our competitors these. A processor who answers all of them plainly and in writing is worth talking to, whoever they are.
- Is this interchange plus or a flat blended rate, and what exactly is your markup?
- List every recurring fee by name: monthly, gateway, PCI, statement, batch and annual.
- How long is the contract term, and is there an early termination fee?
- Is there a reserve on this account, and if so, what type and for how long?
- What is the chargeback fee, and what happens if my chargeback ratio rises?
- Do I own the hardware, or is this a lease, and is that lease cancellable?
- Who is the sponsor bank, and have they boarded my product category before?
- What would cause this account to be shut down, and how much notice would I get?
- Are my funds held before deposit, and how many business days until I get paid?
- Can I have all of this in writing before I sign anything?
If a salesperson gets vague on any of them, that's your answer. The vague part is always the expensive part.
How we quote it
We ask what you sell, where you sell it, roughly what you process, and what your current statements look like. Then we put the structure in writing for your business: what's interchange, what's markup, what recurring fees apply, what the hardware costs and what the risk terms are.
You see all of it before you commit to anything. If a line doesn't make sense, we explain it until it does or it comes out. What we won't do is guess a number on a web page and call it pricing.
What is tiered pricing, and why does it cost more than it looks?
There is a third model nobody advertises by name. Tiered pricing sorts every transaction into buckets, usually qualified, mid-qualified and non-qualified, and charges each bucket at a different rate. The headline number you were quoted is the qualified rate.
The catch is that the processor decides which transactions land in which bucket, and your statement does not show you the sorting logic. Rewards cards, corporate cards and keyed-in sales tend to fall into the expensive tiers, and in a lot of shops that is most of the volume. You cannot audit it, which is the point.
This matters more in our categories than most. A hemp or smoke shop counter runs a heavy mix of rewards credit cards, and an online CBD store keys in more than it swipes. Both push volume straight into the tiers that were never quoted.
How do you read a merchant statement and find what you are really paying?
Your statement is the only honest quote you will ever get, because it is a record rather than a proposal. Most owners never read past the deposit total, and that is where the money leaks.
Start with one number: your effective rate. Add up every processing cost for the month, including the monthly and per-item fees, then divide it by your total card volume. That single figure is what accepting a card actually costs you, and it is the only way to compare two offers that are structured differently.
Then read the fee names one at a time. Anything you cannot trace back to your agreement is worth a phone call. Here is what to look for:
- A single blended rate with no interchange line anywhere on the statement.
- Fees with names that appear nowhere in your agreement.
- A "non-qualified" or "mid-qualified" bucket that quietly holds most of your volume.
- A monthly minimum you have never once fallen under, still being charged.
- PCI non-compliance fees on an account nobody ever helped you certify.
- An equipment lease still billing after the term you thought had ended.
- Deposits that no longer match your batches, with no reserve disclosed.
Send us a recent statement and we will mark it up for you, including the parts that are working fine. That costs you nothing and it is useful even if you stay put.
What does a reserve do to your cash flow?
Reserves are the part of high-risk pricing that surprises people, because they are not a fee. A reserve holds back a share of your deposits to cover chargebacks that might arrive later. Nothing is taken from you, but it is not yours to spend yet.
A rolling reserve releases each batch once its hold period ends, so once the cycle matures it settles into a permanent lag on part of your income. An upfront reserve holds a fixed amount until the account has a track record. Either way, the number that matters to you is not the rate, it is how much working capital is parked and for how long.
Ask whether a reserve applies to your account, what type, what share and what would release it early. A processor who will not answer that in writing is telling you something. See how high-risk processing works for where reserves fit in the wider underwriting picture.
What does switching actually involve?
Less than people fear, and it is worth knowing before a bad contract keeps you somewhere out of inertia. Boarding a new account runs in parallel with your current one, so nothing goes dark at the counter.
The parts that need attention are the ones tied to a term: an equipment lease that has its own end date, an early termination fee, and any gateway your website is wired into. We read your existing agreement and tell you what it costs to leave before you decide anything, including when the honest answer is to wait a few months.
If you also run a register, the switch is sequenced so the item library and the payment side move together rather than in two separate disruptions. That is covered on smoke shop POS and dispensary POS.
Pricing questions we get asked most
Why is there no price on this page?
Because we have no rate card, and inventing one would be dishonest. Processing cost depends on your category, your volume, your average ticket, your card mix and how a sponsor bank reads your risk. Any figure published before those are known is marketing, not a quote. We put your numbers in writing after we see your statements.
Is interchange plus always cheaper than flat rate?
No. Interchange plus is more transparent, because it separates the network cost nobody controls from the markup you are actually negotiating. Whether it costs you less depends on your volume and card mix. A low-volume shop with mostly small debit tickets can genuinely do better on a simple flat rate. The only way to know is to compare both against your own statements.
What is tiered pricing, and why do people warn about it?
Tiered pricing sorts your transactions into buckets, usually called qualified, mid-qualified and non-qualified, and charges each bucket differently. The processor decides which transactions land in which bucket. That is the problem: the expensive bucket tends to fill up, and you cannot audit the sorting from your statement. It is not fraud, it is just a model that hides the markup.
What is a rolling reserve and will I have one?
A reserve is a portion of your deposits held back for a set period to cover potential chargebacks. A rolling reserve releases each batch after that period, so it behaves like a permanent delay on part of your cash flow rather than a one-time hold. Reserves are common in high-risk boarding. Ask whether one applies, what percentage and for how long, and get the answer in writing before you sign.
How do I calculate my effective rate?
Take every processing cost on your statement for the month, including monthly and per-item fees, and divide it by your total card volume for that month. That single figure is what you actually pay to accept a card, and it is the only number that lets you compare two quotes fairly. Quoted rates leave fees out; the effective rate cannot.
Can I pass processing costs to my customers?
Surcharging and cash-discount programs exist, and they are regulated. The card network rules and some state laws set what you may charge, how you must disclose it and where it can appear on a receipt. It is a real option and it is also a compliance obligation, so it needs to be set up properly rather than switched on. Ask us and we will explain how it would work for your counter.
What happens to my pricing if my chargebacks go up?
Two things usually move. You pay a fee per chargeback, and if your chargeback ratio crosses the thresholds the card networks publish, you can be placed into a monitoring program with additional costs and requirements. In the worst case the account is closed. This is why the chargeback fee and the ratio thresholds belong in the conversation before you sign, not after.
Get your numbers in writing
Tell us what you sell and what you process today. We put the full cost structure on one page, with nothing hiding inside a blended rate.