Payments CEO Reveals Why Card Processing Fees Are Hard to Compare

In a candid breakdown of credit card processing fees, William Stapleton, President and CEO of Iron Rock Payments, explains why most business owners never see a clear picture of what they pay to accept a card. Stapleton, who previously founded PayFacto and sold it to Visa in 2019, argues that the confusion is not accidental but a structural feature of how pricing is presented. "Most merchants are shown a rate, not a structure," he said. "A rate tells you almost nothing until you know what it's built from." He breaks a typical card transaction fee into three distinct pieces: interchange, assessment, and markup. Interchange goes to the bank that issued the customer's card and is set by the card networks; assessment goes to the network (Visa, Mastercard, etc.); both are fixed and non-negotiable. The markup is the only portion the processor sets and can negotiate. "Interchange and assessments are the cost of the rails," Stapleton said. "The markup is the only line item that reflects the processor you picked."

Stapleton emphasizes that this distinction is crucial when comparing providers. Business owners often treat the total fee as one negotiable number, but only a fraction can actually move. "If a business owner doesn't know which part of the number is fixed and which part is negotiable, they can't actually tell if they're getting a good deal," he said. This explains why two processors can quote very different headline rates while charging similar effective totals, or vice versa. A lower quoted rate built on a higher markup can cost more than a higher quoted rate with a thinner one, depending on how a business processes its cards. Stapleton advises business owners to ask providers to show interchange and assessment costs separately from the markup, and to inquire how the markup is applied—whether as a flat percentage or with per-transaction fees that behave differently depending on transaction size. "A business that runs a lot of small transactions is affected very differently by a per-transaction fee than a business that runs fewer, larger ones," he noted. "The right structure depends on how the business actually processes, not on which number looks smallest on a sales sheet."

Iron Rock Payments works directly with business owners to walk through statements line by line, separating fixed costs from the markup before any decision is made. Stapleton's goal is not to make every merchant an expert in interchange schedules but to give them a way to ask better questions before signing anything. "You don't need to memorize the card network rules," he said. "You just need to know that not everything on your statement is negotiable, and the part that is negotiable is the part worth actually comparing."