Definition
A processing fee is the all-in charge a payment processor takes for handling a transaction. It usually combines a percentage (the discount rate) and a fixed per-transaction fee (commonly 0.20–0.30). For a 100 transaction at 2.5 percent plus 0.25, the processing fee is 2.75.
Processing fees can include additional components: international card surcharge, currency conversion margin, monthly platform fee, refund processing fee, and chargeback fee. The headline rate rarely includes all of them.
Why it matters
Processing fees scale linearly with revenue — they are one of the few cost lines that double when revenue doubles. For most merchants they are the largest variable cost after cost of goods. Understanding the components is the only way to negotiate them or shop them effectively.
Where this appears in your tools
The Payment Gateway Optimizer breaks processing fees into their components and compares them across providers.