In today’s digital economy, offering flexible payment options is no longer optional—it’s expected. Whether you’re selling online or in person, credit card payment processing is one of the most critical components of your business operations.
But with so many providers—and so many fee structures—how do you know which one is right for your business?
This guide will break down the different types of transactions, explain typical processing fees, and provide a comparison framework based on real, current data.
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What Is Credit Card Payment Processing?
Credit card payment processing is the service that allows businesses to accept payments from customer debit and credit cards. When a customer makes a purchase, the processor facilitates the transaction by:
● Authorizing the payment
● Transferring the funds
● Depositing the money into your business account
It seems simple—but fees, rules, and risk factors can vary widely depending on how the payment is collected (online, in-person, invoiced, or manually entered).
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Common Types of Credit Card Transactions
Transaction Type Description
Invoiced / Online Payments made via email invoice or web-based checkout
In-Person Payments collected using a physical card reader or mobile tap
Keyed-In Manually entering the card details (e.g. phone orders)
ACH Bank Transfer Customer pays directly from their bank account (non-card)
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Credit Card Processing Fees: What to Expect
To give you a clear picture, here’s a simplified version of real-world pricing based on one major provider (as of mid-2025):
Transaction Type Average Fee Charged
Credit Cards & Digital Wallets 2.99% per transaction
ACH Bank Transfers 1% per transaction
In‑Person Payments 2.5% per transaction
Keyed‑In Transactions 3.5% per transaction
Instant Deposit Option +1.75% add-on
Dispute Protection (Optional) Starting at 0.99%
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Which Type of Payment Costs the Least?
If you’re looking to minimize transaction fees:
● ACH Bank Transfers are usually the cheapest (1%)
● In‑person card payments are less expensive than invoiced or manually-entered cards
● Manually-entered or “keyed-in” card payments are the most expensive
● Instant deposits cost extra (often +1.75%) but can speed up cash flow
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How to Lower Your Processing Fees
While flat-rate pricing is simple, it’s not always the most cost-effective. Here are some ways businesses can reduce credit card processing costs:
1. Encourage ACH payments: Promote bank transfers for repeat clients or large invoices.
2. Use in-person tools: A card reader or mobile tap system can reduce per-transaction fees.
3. Avoid keyed-in transactions: These carry higher fraud risk and higher costs.
4. Negotiate better rates: Businesses processing large volumes can often secure lower fees.
5. Compare providers: Flat rates are easy, but interchange-plus models may save you more.
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Understanding your credit card payment processing costs is key to improving profitability. Whether you’re a freelancer sending invoices, a retail store processing swipes, or an ecommerce brand handling recurring payments, the right processor can save you hundreds—or thousands—every year.
Be sure to look closely at how you accept payments, not just who processes them. The transaction method (in-person, online, ACH, keyed-in) often has a bigger impact on your fees than the provider itself.