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Debit Card Processing & Fees: A 2025 Guide for Small Businesses
The average processing fee for debit card transactions is 34 cents in interchange plus your processor’s markup.
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Each time a customer uses a debit card at your business, you’ll pay a debit card processing fee. How much it costs depends on interchange rates, your payment processing company’s markups and their payment processing model.
Here’s a breakdown of how debit card processing works and the fees that come along with it.
How debit card processing works
A lot goes on behind the scenes when your customer pays with a card. Debit card processing can be broken down into several steps:
A customer submits their debit card to pay for a transaction.
The card is dipped, tapped or swiped using a card reader.
Your point-of-sale (POS) system reads the card information and transmits the data to the customer’s card processing network (Visa, MasterCard, etc.).
The processing network verifies the data and evaluates it for the possibility of fraud.
The processing network sends the data to the issuing bank (i.e., the bank that issued the customer’s debit card).
The issuing bank confirms that enough funds are available and passes along an approval to the merchant or business owner.
This process occurs in only seconds — making debit cards (and credit cards) a very efficient form of payment.
Once the transaction is approved, the debit card network verifies the amount you’re owed and completes the process of sending the money to your merchant account. Typically this last part is done quickly, sometimes even the same day.
How much debit card processing fees cost
Debit card transactions cost an average of 34 cents (or 0.73% of the transaction total) ininterchange fees, according to the Federal Reserve. Interchange fees, which go to the card-issuing bank, usually make up the bulk of the processing cost.
However, payment processors also charge their own markups on top of interchange. These vary from one provider to the next and depend on whether they use a flat-rate or interchange-plus pricing structure.
Flat-rate processors treat all card transactions the same, regardless of the underlying interchange fee. That means you may pay the same credit card processing fees for debit card transactions. Here are the key things to know about this type of processing company:
They combine your costs into one fee — usually around 2.6% plus 10 cents for in-person transactions.
If your customers mostly pay with credit cards, flat-rate processors are a convenient option because they make it easier to predict how much you’ll owe in processing fees.
Lots of them use aggregated merchant accounts, meaning you can start accepting payments almost instantly.
Interchange-plus processors, on the other hand, differentiate between debit and credit card transactions. Here’s what to know about them:
This type of processor passes along interchange rates, which are generally much lower for debit cards than credit cards.
Businesses that commonly accept debit cards will save money by going with this type of processor.
Interchange-plus processors are more likely to require you to open an individual merchant account. These types of merchant accounts give you more control over your funds. But the application process can be time consuming.
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Helcim: Best for basic interchange-plus pricing. Helcim’s interchange-plus model means lower rates for debit card transactions. Plus, the company has a free POS app. Read our full Helcim review.
Finix: Best for high-volume small businesses. Finix has exceptionally low markups, but charges a monthly fee for its processing services. If your business processes at least $5,000 in card payments each month, it may help you save in processing fees. Read our full Finix review.
Stripe: Best straightforward flat-rate pricing. Stripe charges the same processing fees for credit and debit card transactions. However, it doesn’t require you to go through the potentially lengthy process of opening an individual merchant account. Read our full Stripe review.
These are the primary factors that impact how much debit card processing costs your business:
Interchange fees
Interchange fees make up a large portion of debit card processing fees. Card networks determine these fees, which are paid to the card-issuing banks. These costs vary depending on the following:
Whether the transaction is regulated or unregulated: Debit card-issuing banks that hold more than $10 billion in assets are subject to strict transaction regulations. These banks cannot legally charge more than 0.05% plus 21 cents (and an additional 1 cent in some cases) in interchange fees per debit card transaction. Those regulations do not apply to banks that hold less than $10 billion in assets.
Whether the debit card is present: Interchange fees for card-not-present transactions are usually more expensive than for card-present ones, due to the additional security risk. Card-present debit card transactions typically require the customer to either sign a receipt or provide their PIN number as an added layer of security.
Your business’s industry: Each business is assigned a merchant category code depending on its industry. Interchange rates vary from industry to industry and, in particular, are higher for ones considered high risk.
What the current interchange rate is: It’s important to note that interchange rates often change over time — sometimes even twice per year. For example, Visa updates interchange fees semiannually.
Payment processor markups
On top of interchange fees, your payment processor will add a markup for facilitating the debit card transaction. The amount will depend on whether your processor uses an interchange-plus or flat-rate pricing model.
Interchange-plus processors are more transparent than flat-rate providers about how much their markups and interchange rates individually cost. If you’re unsure of how you’re being charged or have specific questions about your business’s debit card processing fees, reach out to your payment processor for more information.
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Debit card transactions can be categorized according to how the card interacts with your POS system. This impacts how data is transmitted and validated. Here are the most popular types of debit card processing methods.
PIN debit transactions
This is one of the most common types of debit card transactions. When a customer chooses “debit” on the card terminal at checkout, they’re prompted to enter their four-digit PIN to verify their identity. You might also hear these referred to as online debit card transactions.
Signature debit transactions
A signature debit transaction is processed through credit card networks. After a customer chooses “credit" on the terminal, they are required to sign a receipt instead of typing in their PIN. These transactions are also called offline debit card transactions.
Contactless debit transactions
Contactless debit transactions — those made using a mobile device, smartwatch or contactless debit card — are very similar to PIN transactions. The only difference is that the card, watch or mobile device is held up to an NFC terminal to complete the transaction.
Of course, with a smartwatch or mobile device, the actual debit card is linked to the device through a mobile wallet, like Apple Pay or Google Pay. Once the card information is transmitted to your POS terminal, the debit card transaction process flow continues just like any PIN transaction.
Card-not-present transactions
E-commerce payments, keyed-in payments and card-on-file payments all fall under this category. Similar to signature debit transactions, card-not-present transactions are also processed through credit card networks. However, because there isn’t the same level of verification, they usually carry higher processing fees and risk of fraud.
A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.
Dan Marticio contributed to this article.
Frequently asked questions
How much does a debit card transaction cost?
The average interchange fee for processing a debit card was about 34 cents per transaction, according to 2022 data from the Federal Reserve System.
The actual fees you pay, however, will vary depending on your merchant category, processing method, type of card, size of the issuing bank and whether your customer is using a PIN-based or signature-based transaction.
Do debit cards have processing fees?
Yes. Debit card processing fees involve interchange fees, which vary by card and bank, and payment processing fees, which vary by provider.
Can a business charge a debit card fee?
Many state laws allow for a business to charge a consumer an additional fee, called a surcharge, to pay by credit card. However, this is not allowed by law in any state for debit cards, even when the transaction is processed as “credit.”
How much does a debit card transaction cost?
The average interchange fee for processing a debit card was about 34 cents per transaction, according to 2022 data from the Federal Reserve System.
The actual fees you pay, however, will vary depending on your merchant category, processing method, type of card, size of the issuing bank and whether your customer is using a PIN-based or signature-based transaction.
Do debit cards have processing fees?
Yes. Debit card processing fees involve interchange fees, which vary by card and bank, and payment processing fees, which vary by provider.
Can a business charge a debit card fee?
Many state laws allow for a business to charge a consumer an additional fee, called a surcharge, to pay by credit card. However, this is not allowed by law in any state for debit cards, even when the transaction is processed as “credit.”
Featured card placement may be affected by compensation agreements with our partners, but these partnerships in no way affect our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.
