Question 1

What is an effective rate?

Accepted Answer

Your effective rate is the total percentage of card sales you pay in processing fees. Calculate it by dividing your total monthly processing fees by your total card volume, then multiplying by 100. Example: $450 in fees on $15,000 in volume = 3.00% effective rate. This single number cuts through the complexity of tiered and flat-rate pricing to show what you actually pay.

Question 2

What's a good effective rate for a small business?

Accepted Answer

For most businesses, an effective rate below 2.50% is solid, and below 2.00% is excellent. The NerdWallet 2026 benchmark for efficient processors is around 2.30%. Flat-rate processors like Square and Stripe average 2.60–2.90%. Interchange-plus processors like Kurv and Helcim can bring rates to 1.80–2.20% for higher-volume merchants because you pay actual interchange costs plus a transparent markup.

Question 3

What's the difference between flat rate and interchange plus?

Accepted Answer

Flat-rate pricing (Square, Stripe) charges one blended percentage regardless of card type — simple but often more expensive. Interchange-plus pricing (Kurv, Helcim) passes through the actual cost that Visa/Mastercard charge the processor, then adds a fixed markup. Interchange-plus is usually cheaper for volumes above $10,000/month, and it's the only model where you can see exactly what the processor earns. See our [interchange fees guide](/guides/interchange-fees-explained) for a full breakdown.

Question 4

Can I negotiate my processing fees?

Accepted Answer

Yes, particularly if you're on interchange-plus with a traditional processor. The markup portion (the only part processors control) is almost always negotiable once you have 3–6 months of statements to show. Flat-rate processors like Square rarely negotiate, but they also don't require it since their rates are competitive at lower volumes. The calculator's 'processor markup' segment shows exactly how much room there is to negotiate.

Question 5

How accurate are these estimates?

Accepted Answer

The calculations use 2026 Federal Reserve and card-network averages: interchange at 1.70% and Visa/MC assessments at 0.14%. Your actual rates will vary based on your card mix (rewards cards cost more), industry risk classification, and any hardware or monthly fees not included here. For exact numbers, request a written quote — most processors can turn this around in 24 hours. Always compare quotes against your current statements.

Question 6

What does processor markup mean?

Accepted Answer

When you swipe a card, the card networks (Visa, Mastercard) and issuing banks charge interchange fees that go entirely to them — your processor can't change these. The processor markup is what the processor charges on top for their services: underwriting, fraud tools, customer support, and profit. Interchange-plus pricing shows this markup as a separate line item. Flat-rate pricing bundles it in, making it harder to see. The fee breakdown chart in this tool shows how much of your bill is unavoidable vs. negotiable.

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