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Sales: 888.600.1458 Support: 833.214.2715

Understanding Payment Processing Fees

 

With iTab POS, payments flow seamlessly and transparently through your POS system, allowing your team to spend less time managing transactions and more time serving customers and growing your business.

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Understanding Payment Processing Fees

Simple & Transparent Payment Processing

For retail and restaurant businesses, payment processing is one of the largest ongoing expenses. iTab keeps pricing simple and transparent so you can protect margins, manage cash flow, and focus on your business.

Clear, easy-to-understand fees on every transaction

Unlike providers that hide fees inside complicated contracts or constantly adjust custom rates

No hidden charges or long-term surprises

iTab offers straightforward payment processing with no surprises.

Payments fully integrated within your POS system

Makes it easier to control costs and forecast monthly expenses.

 

Running a business takes hard work and smart budgeting. Every payment affects your bottom line, so you deserve clear, transparent processing costs with no surprises.

Ever Wonder Where Processing Fees Go?

Each time a customer makes a payment with their credit card, the transaction is securely processed through your POS system. A small processing fee is applied to cover interchange, card network, and payment service costs.

 

  1. Interchange fees: Paid to the customer’s card-issuing bank. Rates vary based on card type (credit/debit, rewards), transaction method (chip, tap, online) & risk level.
  2. Card network fees: Charged by card brands like Visa, Mastercard, American Express, and Discover for moving transactions through their networks.
  3. Processor / gateway fees: Paid to the payment processor for authorization, security, PCI compliance, reporting & settlement; often a small percentage plus a per-transaction fee.
Simple & Transparent Payment Processing

Payment Types

A major factor that impacts processing fees is how the transaction is accepted, either card-present or card-not-present.

A major factor that impacts processing fees is how the transaction is accepted
Card-Present (CP) Transactions

 

These occur when the customer pays in person and the card or mobile wallet is physically used at checkout through your POS system. Because they are more secure, they typically have lower processing fees.

 

Examples include tap to pay, EMV chip insert, and magnetic stripe swipe.

 

Card-Not-Present (CNP) Transactions

 

Card-not-present transactions occur when the customer and card are not physically at the store, and payment details are entered digitally. These transactions usually carry higher risk and slightly higher fees.

 

Examples include iTab online ordering, third-party delivery platforms, phone orders, and remote invoices.

Want to learn more about how payment processing works?

When a customer pays by card, several parties and fees are involved behind the scenes. Most of your total processing cost comes from interchange fees and card network fees, which are established by the banks and card brands.

Interchange Fees

Interchange fees make up the largest portion of card processing costs. These fees are determined by the card networks and paid to the bank that issued the customer’s card for each transaction. They usually include a percentage of the sale amount plus a small fixed fee per transaction. For American Express, these charges are commonly referred to as discount fees.

Network Fees

Network fees are charged by the card brands themselves and paid directly to them. These fees vary depending on the type of card and transaction. You may also hear them called assessments or association fees.

Issuing Bank

The issuing bank is the financial institution that provides the customer’s credit or debit card. These banks partner with major card brands such as Visa or Mastercard. Examples include large national banks and regional financial institutions.

Card Network

Card networks operate the systems that connect banks and allow transactions to move securely between the customer, merchant, and financial institutions. Visa and Mastercard act strictly as networks, while American Express and Discover serve as both networks and card issuers.

Payment Processor

The payment processor handles the technical side of the transaction. It securely routes payment data, applies encryption, performs fraud screening, and ensures the transaction is properly authorized and recorded within your POS system.

Merchant Bank

Also called the acquiring bank, the merchant bank works with the business to accept card payments. It receives approved funds from the issuing bank and deposits them into the merchant’s business account.