In the world of digital commerce, understanding how payment processing fees work is critical to protecting your profit margins—especially for high-risk industries like jewelry multi level marketing companies. Whether you’re launching an online store or scaling a subscription business, the cost of processing payments can make or break your bottom line. And while fees may seem like a fixed cost of doing business, they’re often negotiable and can vary widely depending on your provider, transaction types, and risk profile[1]. If you’re consistently seeing persistent Venmo payment message errors or having trouble navigating bin non vbv restrictions, it’s likely you’re also missing out on cost-saving opportunities embedded in your merchant services agreement.
Payment processing isn’t just about swiping cards—it’s a layered system involving card networks, issuing banks, payment gateways, and merchant services providers. Each party charges a fee for its role in facilitating the transaction, but many businesses don’t realize just how these fees are calculated or where they might have leverage. Without proper fee transparency and ongoing analysis, merchants often overpay for services or miss opportunities to switch providers better aligned with their business type. This blog will break down the different types of processing fees, explain how merchant categories impact costs, and provide actionable advice on how to manage—and reduce—your processing expenses.
Types of Payment Processing Fees
To fully understand payment costs, it’s important to break them down into three main categories: interchange fees, assessment fees, and processor markups. Interchange fees are set by card networks like Visa or Mastercard and paid to the card-issuing bank; these are typically non-negotiable. Assessment fees are collected by the card brands themselves, and while also standardized, they usually represent a smaller slice of the total. The processor’s markup, however, is the most variable component—and where merchants often have the most room to negotiate. These markups can be structured as flat fees, tiered pricing, or interchange-plus models. Each model affects transparency and long-term scalability, especially for businesses that process large transaction volumes or accept multiple payment types.
When evaluating merchant services, it’s crucial to look at the full pricing structure, not just headline rates. Some providers offer deceptively low base fees but bury costs in monthly service charges or batch fees. Others may penalize you for international cards, higher ticket sizes, or card-not-present transactions. Reviewing your merchant statement line-by-line can uncover hidden surcharges that erode your revenue without obvious justification. Additionally, specialized industries like jewelry multi level marketing companies may face higher rates due to perceived chargeback risk, which is factored into your MCC (merchant category code) and can influence base rates.
How Merchant Category Impacts Fees
Not all businesses are created equal in the eyes of payment processors. High-risk merchants—such as those in multi level marketing, firearms, CBD, or adult services—typically face higher processing fees due to increased chargeback ratios or regulatory scrutiny. Your MCC, assigned when you set up your merchant account, helps determine your risk level and impacts the interchange rates you’re charged. For example, a standard eCommerce apparel store might receive a favorable MCC with low risk, while a company selling high-value jewelry through an MLM model will be classified as high-risk and charged accordingly. This classification affects not only the fees you pay but also your ability to get approved by certain providers.
Merchant category also plays a role in which payment types you can support. Some high-risk merchants may be restricted from offering buy now, pay later services or from using platforms like Venmo or Cash App due to compliance concerns[2]. When you encounter persistent issues like a Venmo payment message that won’t resolve or can’t link your merchant account with certain tools, your business model could be the root cause. That’s why working with merchant services providers who specialize in high-risk processing is essential—they understand how to navigate underwriting rules and offer compliant solutions that don’t compromise functionality or cost-efficiency.
Hidden Fees to Watch Out For
Even after selecting a provider with seemingly fair rates, merchants can still fall victim to hidden fees that inflate processing costs over time. Common examples include PCI compliance fees, statement fees, AVS (address verification) fees, and chargeback fees. While some of these are justifiable, others are arbitrary line items used by processors to boost profits at your expense. Worse, many merchants don’t notice them because they’re buried in hard-to-interpret statements or lumped together under generic terms. This lack of transparency disproportionately impacts startups and small businesses who may not have dedicated accounting staff to audit each line item[3].
Monthly minimum fees and non-qualified transaction charges are also red flags. A provider that charges you extra for not hitting a certain processing volume each month is likely not well-suited for businesses with seasonal cash flow or growth-stage sales cycles. Similarly, non-qualified charges may apply to transactions that fall outside your pricing tier—often without clear explanation. These can quickly add up, especially if your business accepts a lot of card-not-present transactions, which are common in eCommerce or subscription-based models. The best protection against hidden fees is clear documentation, merchant services statement analysis, and regular provider check-ins.
Negotiating Lower Rates with Your Processor
Many merchants are surprised to learn that payment processing fees are negotiable—especially when it comes to the processor markup. While you won’t be able to change interchange or assessment rates, you can often negotiate better terms for the processor’s portion, especially if you’re doing high monthly volume or have a clean chargeback history. Begin by requesting an itemized breakdown of all fees and comparing it to competing offers. Use third-party audits or online merchant account providers to benchmark what similar businesses are paying. Armed with data, you’ll have more leverage when asking for lower rates, waived monthly fees, or access to better technology like EMV terminals or integrated credit card POS systems.
It also pays to understand the different pricing models available. Flat-rate providers may be simple to work with but more expensive for businesses with higher average ticket sizes. Interchange-plus pricing is more transparent and scalable but may come with more line items. Your goal should be to find a model that aligns with your sales patterns and gives you control over the biggest cost drivers[4]. Don’t be afraid to switch processors if your current one isn’t transparent or willing to adjust your pricing structure. The merchant services landscape is competitive, and processors often offer incentives to win new business—especially from high-risk verticals.
The Role of Technology in Fee Optimization
Technology plays a critical role in minimizing processing fees and improving overall payment performance. Smart routing algorithms can direct transactions to the most cost-effective payment networks in real time, while fraud detection tools reduce chargeback exposure and help maintain lower risk profiles. Additionally, using modern credit card POS systems with built-in analytics allows merchants to track authorization rates, identify processing failures, and uncover patterns that contribute to inflated fees. Software integrations with platforms like Shopify or accounting tools like QuickBooks can also streamline reconciliation and help identify cost-saving opportunities across your entire payment stack.
For startups or growing eCommerce brands, selecting a processor with robust APIs and flexible reporting tools can be just as important as getting the lowest rate. These features provide real-time visibility into where your fees are going and how performance metrics like approval rates or refund frequency impact your bottom line. In high-risk verticals, choosing processors who understand your tech stack, support third-party tools, and proactively monitor risk helps you keep control over costs—even as your volume increases or your business model evolves[5].
Insights from the Experts
Processing fees aren’t going away, but that doesn’t mean you can’t control them. By understanding how each fee component works and knowing what red flags to look for, merchants can take meaningful steps toward optimizing costs and improving profitability. The most successful businesses conduct regular merchant services statement analysis, understand the implications of their MCC designation, and use technology to reduce chargebacks and payment failures. If you’re unsure where to start or have been burned by opaque pricing in the past, talking to a knowledgeable partner like Payment Nerds can make all the difference. Our team specializes in guiding high-risk merchants through provider selection, statement audits, and technology integrations to ensure you’re never overpaying for the services you need.
Sources
- Visa. “Understanding Interchange Fees and Assessments.” Accessed June 2025.
- Federal Trade Commission. “Payment Processing and Fee Transparency.” Accessed June 2025.
- McKinsey & Company. “Cutting Through the Complexity of Merchant Payments.” Accessed June 2025.
- Harvard Business Review. “Smart Pricing Strategies for Payment Providers.” Accessed June 2025.
- PCI Security Standards Council. “Understanding PCI Compliance Fees.” Accessed June 2025.
