Credit card fees for restaurants: what you pay and why

Every card sale carries three fees stacked together: interchange, which goes to your customer's bank and is set by the card network, a small network fee, and your processor's markup. Interchange is usually the biggest piece, and your processor doesn't set it. Debit cards from big banks have a federal cap, a surcharge on credit cards is allowed by Visa's rules but limited by some states, and the big Visa and Mastercard settlement is not final yet.

What you pay on each swipe: three layers

Three companies touch a card sale besides you. The customer's bank (the issuer) gave them the card. The card network (Visa, Mastercard and others) passes the information and the money between banks. Your acquirer, which sometimes uses a third-party processor, provides your card services and keeps your merchant account, according to the Federal Trade Commission's guide for businesses. What comes off each sale is called the merchant discount, and it covers interchange and the other processing fees below.

• Interchange. Paid to the issuer. The U.S. Government Accountability Office (GAO) says the networks set the rates, adjust them twice a year, and build each one from a fixed amount per sale plus a percentage of the purchase. Its 2025 report on what federal agencies pay to take cards found interchange made up nearly 90% of their fees. It also says network officials generally don't negotiate interchange rates with individual merchants.
• Network fees. GAO describes these as generally fixed amounts per sale, set by each network. On debit cards, the Federal Reserve found the average network fee was 12.9 cents a sale in its report on 2023 data, and acquirers and merchants paid 64.9% of all network fees; issuers paid the rest.
• Processor markup and other fees. What's left. GAO says processors charge for routing sales to the networks and banks, and that other fees can cover things like software, fraud prevention and terminal rental. The Federal Reserve Bank of Kansas City puts the costs of a debit card sale in the same three groups in its 2025 article on small merchants. Your processor contract sets this layer.

Visa publishes its interchange rates for anyone to read. Its rate sheet effective April 18, 2026 says merchants don't pay interchange directly: they pay the merchant discount to their bank or processor, which can bundle several services. For a card-present restaurant sale, the sheet lists 2.10% (with a 4-cent minimum) on basic consumer credit cards and 2.60% on Signature, Infinite and Signature Preferred cards. It also lists a higher “non-qualified” consumer credit rate of 3.15% plus 10 cents, which is worth asking your processor about.

Debit: what the Federal Reserve capped

Debit cards from big banks have a federal price limit. Under the Federal Reserve's Regulation II, the interchange on one of those debit sales may not go above 21 cents plus 0.05% of the sale, plus 1 cent if the issuer meets fraud-prevention standards, as the Board's page of average fees states. The FTC's guide says the cap covers only issuers with $10 billion or more in assets, so cards from smaller issuers are exempt. It also says credit card fees and fees your processor adds aren't capped, and that merchants must be offered a choice of at least two networks for most debit sales.

The Board's numbers for 2024 show the gap. Capped debit sales averaged 23 cents, or 0.47% of the sale, while exempt debit sales averaged 51 cents, or 1.21%. All debit together averaged 34 cents, or 0.73%.

The cap could move. In October 2023 the Board proposed lowering it, from 24.5 cents to 17.7 cents on an average $50 debit sale. On the Board's average-fee page, updated December 19, 2025, the cap still reads 21 cents plus 0.05%. A court is also involved. In August 2025 a federal court in North Dakota found the Board's fee standard contrary to law and set it aside, but paused its own order while the Board appeals, to keep fees from becoming “a completely unregulated market,” per its amended judgment. The appeal was argued on May 13, 2026, and the Eighth Circuit docket showed no decision when I read it, though its copy may lag; the latest entry was July 14, 2026. For now the cap stands, but it could change.

Can you add a surcharge?

A surcharge is an extra fee added to the bill because the customer pays by card. A discount for paying another way is different. The FTC's guide says the card networks can't stop you from offering a discount or incentive for a payment method, as long as it is offered to everyone and clearly disclosed. It also says you may set a minimum for credit card purchases, if it's the same for all issuers and networks and no more than $10.

For surcharges, start with the network's own rules. Visa's public rules (April 18, 2026 edition) allow a U.S. merchant to add a surcharge to a credit card sale, “subject to applicable laws.” The rules also say:

• The surcharge can be no more than 3.00%, and the sign at checkout must say it is not greater than your Visa credit card merchant discount rate.
• It applies to credit only. Debit cards can't be charged it, including a debit card the customer runs as “credit.”
• You tell your processor in writing at least 30 days before you start or announce it.
• You disclose it at the entrance and at checkout, and the customer can cancel after seeing it on online and phone orders.
• It is set the same for all Visa credit cards, or the same for each card product type, not both.
• A clause about other card brands that limit surcharging can block it. Ask your processor how that applies to you.

Mastercard and other networks have their own surcharge rules, so ask your processor which apply to your business.

State law is a separate test, and it is where many owners get stopped. Connecticut's Department of Consumer Protection says its law bars businesses from adding a fee that raises the total because of the payment method. Massachusetts says no seller may surcharge a customer who uses a credit card instead of cash or a check, while a discount offered to all buyers and clearly disclosed is not a finance charge. Maine's statute bars extra charges for paying by credit or debit card, and says a discount is not a surcharge. Other states have different rules, and legislatures change them. For your state, check with its attorney general or consumer protection office, read your processor agreement and ask a lawyer.

The big lawsuit: what is and isn't settled

Since 2005, merchants' lawsuits against Visa and Mastercard over their rules have been combined in one federal case in Brooklyn (E.D.N.Y.). A class of more than 12 million merchants is covered by a settlement of the part that asks for changes to the networks' rules rather than money. A judge rejected an earlier version in June 2024. The merchants and networks signed an amended one in November 2025, and on June 9, 2026 Judge Cogan granted it preliminary approval, writing that this suggests final approval is likely. That is not final approval. According to the court's scheduling order, the final approval hearing is set for November 16, 2026, and the docket shows objections filed in September by merchants and trade groups, among them one filing for 978 merchants and trade associations. The latest entry I read was October 5, 2026.

If it is approved as written, the court's order says it would:

• Let merchants accept a network's standard consumer cards without its premium cards, or consumer cards without commercial cards.
• Let merchants surcharge Visa and Mastercard credit at the brand or product level, up to the lesser of their cost of accepting the card or 3%, whether or not they accept other card brands.
• Cut the combined average effective credit card interchange rate by 10 basis points (0.10%) for five years, with a proportional cut for large merchants on negotiated rates.
• Cap posted interchange on standard consumer credit cards at 125 basis points (1.25%) for at least eight years.

Nothing in that list is in force today. The 10 basis points is a system-wide average, so your statement may not move by that amount. The court also noted objectors' point that merchants in states that cap or ban surcharging couldn't use the surcharge change.

How to read your statement

Pricing comes in a few shapes. GAO lists three models common among processors: interchange-plus, tiered and flat-rate. The Kansas City Fed says a flat rate, such as 3% of every sale, covers interchange and all other fees for every card and brand, and that small merchants often choose it. Under interchange-plus, each fee is charged separately. Large merchants usually pick that, and the Bank says it is more transparent. With a flat rate you can't see how much of your percentage is interchange and how much is markup.

Compare it with a wide range. GAO's review of published industry estimates found of 1.0% to 4.4% of sales, which GAO did not verify. A rate near the bottom or the top of that range tells you less than the lines behind it, so read each line:

• Interchange, by card type if the statement splits it out. Debit from a large bank should look like the capped figures above.
• Network fees, usually a small amount per sale.
• Your processor's markup, as a percentage plus cents per sale.
• Everything else: monthly, statement, terminal, software and any fee for sales that don't qualify for a lower rate.

On a flat-rate statement you may see one line. Ask your processor for the breakdown, or a quote on a pricing model that shows each part.

What one point is worth: an example

A percentage point sounds small until you multiply it by a month of card sales. Here is a made-up restaurant.

In the example, card fees are 2.4% of all sales: $2,380 on $100,000. Your prime cost, food and drink plus total labor as a share of sales, leaves that out. So a restaurant can hit its prime cost target and still lose a couple of points of sales to card fees. If you want to see where else money leaks, see why a busy restaurant can still lose money.

This week

1. 01Pull your last three monthly statements. For each, divide total card fees by card sales to get your effective rate, and write the three numbers down.
2. 02Find your pricing model on the statement and mark each line: interchange, network fees, markup, everything else. If you can't tell, that is your first question.
3. 03Call or email your processor with four questions: What is my markup, as a percentage plus cents per sale? Which of my sales hit a non-qualified or other higher rate, and why? Is my debit routed to the lowest-cost network I'm offered? What does my contract say about price changes and ending early?
4. 04Before any surcharge or cash discount sign goes up, check your state's rule with its attorney general or consumer protection office, your processor agreement and, if you're unsure, a lawyer. Visa's rules also need 30 days' written notice to your processor.
5. 05Don't plan around the settlement or the debit cap until the courts rule. Write November 16 in your calendar and look at the docket afterward.