by Matt Rej
Payment processors are really good at inventing fees designed to go unquestioned. When slipped into a multi-page statement with hundreds of line items, certain charges just blend in with the rest so merchants assume they’re all legitimate.
This is a huge problem for businesses that can’t differentiate what’s actually mandatory from a junk fee that just pads the processor’s margin.
Let’s talk about some of these specific fee types below, so you can see if any are hiding in plain sight on your statements.
1. Regulatory Fees
Including the word “regulatory” or “regulation” in a fee name is a classic tactic that processors use to make you assume a fee is mandatory. It sounds legit until you dig a little deeper and question what you’re actually paying for.
One specific example is the Regulatory Assurance Fee. Shift4 charges $325 per device annually with a three-device max, which means most businesses pay $975 per year for this fee.
Other processors have their own variations of similar charges, but they’re all founded on the same premise: there’s some type of “regulatory body” or entity that’s forcing industry-wide regulations, and the fee goes towards that.
It’s false, misleading, and the exact type of fee that you should push back against.
2. Risk Assessment Fees
Processors do take on a certain amount of risk whenever they process a transaction for your business. If the charge is fraudulent or the cardholder files a chargeback, they’re on the hook for fronting the money to the issuing bank until they can recover those funds from you.
But this is all baked into their underwriting process when they set up your merchant account and set your rates initially.
There shouldn’t be a separate Risk Assessment Fee assessed on your payments to account for this. That’s just part of being a payment processor.
We typically see this on Global Payments statements and applied by Global subsidiaries. The amount varies widely, as low as 0.05% and as high as 3% on your entire volume.
3. Compliance Fees
PCI compliance in itself is very much legitimate.
The Payment Card Industry Data Security Standard (PCI DSS) is a set of rules and guidelines that merchants must follow to protect cardholders and sensitive transaction data. It’s on businesses to maintain certain standards, and there can be penalties for non-compliance.
However, some processors use this concept to extract more money from unsuspecting merchants.
I’ve seen statements that have both PCI Fees and PCI Non-Compliance Fees charged to the same account, plus phantom “Security and Compliance” charges added on.
This makes no sense. You’re paying extra for PCI compliance (which you shouldn’t have to), plus an extra compliance fee (again, not legit), and yet you’re still being charged for non-compliance?
The fee amounts are also all over the place. One processor may charge $19.99 per month while another charges $59.95 per month. No legit fees have this much variation if they’re supposedly applied “industry wide.”
4. Card Network Support or Sponsorship Fees
Including a specific card network in the name of a fee is another common tactic used by payment processors when coming up with new fees.
Amex Support Fees or Amex Sponsorship Fees are common culprits, charged around 0.25% of your total American Express volume.
Processors hope you’ll see the “American Express” in the name and assume it’s a charge being imposed at the network level. And they’re usually right in their assumption, as most merchants don’t give this a second thought.
When in reality, neither of these fees is coming from American Express. It’s just your processor padding their bottom line at your expense.
5. Enhanced Security Fees
Most businesses understand that accepting credit cards means they’re handling sensitive data. This data needs to be protected at the time of the transaction, while it’s in transit, and in storage, regardless of the transaction environment.
Having extra security sounds like a good idea. So processors will upsell you on this, giving them the green light to charge you another fee every month for something that doesn’t exist.
The reason why this fee sounds so legitimate is because it implies that there’s some type of regular security that just isn’t enough. Processors need to ensure transactions are secure, and there’s no extra charge for this.
You may have some one-off fees from the networks or processors for things like account updates on expired cards. But flat monthly “security” fees are not actually tied to a service you’re getting in return, no matter how convincing your processor’s marketing materials make it sound.
6. Settlement Funding Fees
This is another prime example of specific words used in a fee name to throw you off.
Settlement and funding are both very important parts of payment processing. Settlement is the final step of the transaction that transfers between issuing and acquiring banks. And funding occurs when the money hits your account.
You obviously need all of this to accept credit cards, so seeing a Settlement Funding Fee on your statement seems like it’s probably necessary. It’s not.
Facilitating the transfer of funds from the cardholder’s bank to your account is just part of your processor’s job. Not something they should be charging you extra for, and certainly not something that should be applied on your total payment volume.
7. International Card Handling Fees
It’s true that cross-border transactions are typically more expensive to process. There’s an added cost when moving money between foreign banks, and there’s also an added risk.
So card networks have additional assessment on international transactions, and some processors will also charge extra for this.
The problem here is when processors disguise international markups as network fees by including the card network name in the charge and itemizing everything in the same place. For example, you might see these three fees on your statement:
- MC International Cross Border Fee – 0.60%
- MC International Acquirer Support Fee – 0.85%
- MC International Card Handling Fee – 0.60%
To the untrained eye, all three of these seem legitimate. But only the first two are actual Mastercard assessments, and the third is a processor markup.
While your processor may have a good reason to charge you more for international transactions, presenting it like this is incredibly deceptive and tricks merchants into thinking they can’t do anything about it.
The actual international network assessments are set in stone and non-negotiable, whereas the processor-imposed fee can 100% be negotiated and reduced.
8. Transaction Network Access Fees
Some network access fees are legitimate, like Visa’s Base II Network Access assessment.
But broad network access fees or transaction network access fees as blanket charges to cover all networks are completely bogus.
Again, this is another case of clever word choice when naming a fee. By making the fee sound almost identical to a legit network assessment, you’re less likely to question it.
9. Infrastructure Upgrade Fees
Another tactic that we see from processors involves a legit-sounding explanation for a new fee. One of the best examples of this is tied to infrastructure upgrades.
In theory, it makes sense. Your processor sends you a notice discussing “infrastructure improvements” they’re making that will enhance the payment experience and boost security, so you’ll see an Infrastructure Upgrade Fee on an upcoming statement.
Do processors need to upgrade their systems periodically? Of course. But that’s no excuse for charging you more money.
You aren’t responsible for covering their operational costs. And there’s no way to verify that “upgrades” even took place, as your payment acceptance process will remain unchanged.
How to Determine If a Merchant Fee is Legit or Not?
Junk fees don’t always jump off the page at you with flashing lights and red flags to signal they’re illegitimate.
Many of the fees covered above do the exact opposite. They blend in with legit charges, and they’re often strategically placed on statements alongside mandatory fees so nothing seems out of place.
But there are certain characteristics that most of these non-legit fees have in common:
- Funds go directly to the processor (not the card networks or acquiring banks).
- They’re not universally applied across all merchant accounts.
- The rate varies between merchants using the same processor.
- Nothing is directly tied to a specific service, benefit, or transaction type.
- The amount has increased drastically in recent years.
The most important takeaway is this: never assume that a fee is legitimate.
Just because it says “Visa” or “Amex” in the name and it appears alongside other network assessments, it could be a processor markup disguised as something you’ll overlook.
Interchange fees and assessments are publicly published. If you can’t tie a fee to one of those, then it’s coming from your processor. Everything charged by your processor is negotiable, and some of the most legit-sounding fees are completely made up to pad their margins.
If you have questions about a specific fee or you want a professional to look through your statements to identify bogus charges, just contact our team here at MCC for a free audit.