U.S. Merchants Paid a Record $198.25 Billion in Card Fees in 2025

U.S. merchants paid a record $198.25 billion in credit and debit card processing fees in 2025, up 219% from $62.1 billion in 2009, according to Nilson Report figures published by the Merchants Payments Coalition. For most businesses, card acceptance is now the largest operating cost after labor.

The networks' own top rates have barely moved in that period. When the Government Accountability Office studied interchange in 2009, Mastercard's highest rate was 3.25%. Today it is 3.30% — five basis points in 17 years. Visa's top rate was 2.95%; it is now 3.15%, but that increase is recent, and most Visa transactions still clear at 2.95% or less.

More people paying by card explains much of the growth in the $198 billion total. It does not explain why so many merchants watch their effective rate creep up year after year while the networks' published rates barely move. That gap is the processor's markup and the fees stacked on top of it — and, unlike interchange, it can be negotiated.

The warning comes from an insider. The author spent more than a decade in the credit card processing division of a commercial bank, as an executive at Fifth Third Processing Solutions, later Vantiv and Worldpay, now part of Global Payments. During the Great Recession, as merchant volumes and processor revenue fell, the response was new fees. The day the company announced a monthly charge of about $8.95 per merchant ID, the mood in the building was celebration. "I blurted out in a boardroom meeting I got into banking to make my mother proud, and I'm leaving because I could no longer tell my mother what I did for a living," the author writes. That was January 2009.

Later that year, the author and three other former executives founded a credit card processing auditing firm. Their audits find overbilling in about 99% of the statements they review, and more than 90% of the accounts audited were not set up properly from the start.

What does the markup math look like?

Interchange — the wholesale cost every processor pays — should account for 80% to 90% of what a merchant pays. A competitive markup over interchange can run as low as 0.02% to 0.05%. Commonly reported markups range from 0.15% to 0.90%.

The spread compounds fast. On $2 million in annual card sales, the difference between a 0.50% markup and a 0.05% markup is $9,000 a year — before counting any additional junk fees.

Which five questions should merchants ask before signing?

The author recommends asking all five in writing, signed by an officer of the company, on paper — not email, not a phone call. "You want something that will hold up in court."

• "Is my rate fixed, or can you raise it without my signature?" Nearly every merchant agreement lets the processor change fees — even terms — with nothing more than notice, usually buried in fine print on the monthly statement. Visa and Mastercard release rate changes in April and October, with more than 200 rules and rates changing at once. A processor increase landing in the same cycle disappears into that noise.
• "Will you show me your markup separately from interchange?" Interchange-plus pricing shows the two costs on separate lines. Tiered and flat-rate pricing blends them. "If a processor won't unbundle it, it is hiding the markup," the author writes. Then ask whether interchange is passed through at cost or padded.
• "What happens if I want to leave?" Watch for early termination fees, liquidated damages clauses that bill the processor's projected profit on the remaining term, equipment leases that outlive the contract, and auto-renewal clauses requiring cancellation inside a narrow window — some processors push the notice period to 90 days before renewal.
• "Which fees on my statement do you control?" The card brands set interchange and assessments; the processor sets much of what sits on top. "Annual PCI fee" and "regulatory compliance fee" sound official and are often pure margin. The $8.95 fee the author watched get invented "never appeared on anyone's statement as 'extra profit.'"
• "Will you put every verbal promise in writing?" The classic pitch is a low effective rate that disappears after 90 days, or a price-match promise nobody can find a year later. If it is not in the contract, it does not exist.

Why does the contract matter more than the rate?

Good rates are worthless if the contract lets the processor change them at will, the author argues. Merchants should negotiate the contract as hard as the pricing: strike or cap termination fees, shorten or remove auto-renewal, and lock the markup in writing.

Monitoring matters too. Processors count on merchants not understanding the codes and acronyms on their statements, or lacking the hours to check for overbilling each month. "That is how accounts drift."

The stakes are structural. Unlike ordinary vendor bills that a business validates before paying, merchant processing gives the processor unvetted access to the business's bank account — what the author calls the "keys to the kingdom." "They take what they want, and then they send you a statement that you can't read or validate."

Merchants vetting contracts — whether negotiating directly or through an attorney or specialist firm — should verify any auditor's independence, check BBB records and LinkedIn profiles, and avoid firms that are themselves processors in disguise. The author's own advice for any engagement: sign nothing that is not month-to-month and lacks a money-back guarantee.