What are payment processing fees?

Payment processing fees refer to the costs associated with processing electronic payment transactions, such as credit card, debit card, or digital wallet payments. These fees are charged by payment processors, which are third-party companies that provide the infrastructure and technology necessary for merchants to accept electronic payments.
Payment processing fees typically include a percentage of the transaction amount, known as the "discount rate," as well as a fixed per-transaction fee. The discount rate is usually around 2-3% of the transaction amount, while the per-transaction fee can range from a few cents to a few dollars.
Payment processing fees are necessary to cover the costs associated with processing and settling electronic payments, such as the costs of maintaining payment networks, fraud prevention measures, and compliance with regulatory requirements. These fees also cover the costs of providing customer support and resolving disputes related to payment transactions.
It's important to note that payment processing fees can vary depending on the payment processor, the type of payment method used, the merchant's industry and transaction volume, and other factors. Merchants should carefully evaluate payment processing fees when choosing a payment processor to ensure they are getting the best value for their business needs.