What are the credit card processing fees and how do they work? How much does $10,000 cost?

Colorfully 2022-04-20

What are the credit card processing fees and how do they work? How much does $10,000 cost?

Nowadays, many people use credit cards to make purchases in their daily lives, global payments card processing fees and swiping them will incur a processing fee. Although this fee is usually borne by the merchant, it is a good idea for cardholders to know how this fee is calculated.

Credit card processing fees are usually paid by merchants to commercial banks and third-party financial institutions, i.e., they are deducted from the cardholder's credit card spending amount, and the remaining amount is counted as the actual amount billed by the merchant.

Some merchants will refuse to swipe a credit card unless the cardholder voluntarily behaves to bear the fee, so it is also necessary to study different management standards and algorithms for student card processing fees.

In general, credit card processing fees are determined by POS rates and amounts. However, the fee rate for traditional card payment methods is different from that of flash payment methods.

For the traditional card swipe method, such as inserting the card directly into the POS or swiping the card, the standard swipe rate is 0.6%. For flash payment, the rate is 0.38% for cards under 1000 and 0.6% for cards over 1000.

Specific formula: Credit card transaction fee = Credit card fee rate x Credit card amount

How much is the chargeback fee for 10,000?

If you swipe $10,000, you will be charged at least $60 if you swipe your card in the traditional way, i.e. $10,000 x 0.6% = $60.

If you swipe your card directly at 0.6%, you will also be charged at least $60.

If we split some small amount under 1000 yuan, i.e. 10 times 1000 yuan, then we only need 38 yuan for the handling fee issue.