If you just received a notice about an annual fee from your credit card processor, you’re not alone. December is prime time for processors to hit merchants with these charges, and they’re getting more expensive every year.
But annual fees aren’t quite what they seem to be.
And it’s often a red flag that your processor is overcharging you elsewhere on your merchant account.
Annual Fees Are Pure Processor Markup
First and foremost, you need to understand that annual fees are strictly another processor markup.
They don’t go to the card networks, they’re not required for your account to function, and they certainly don’t provide annual additional value to your business.
Annual fees are just another way for your processor to squeeze more money from your account.
A few hundred dollars charged across millions of different merchant accounts, and your processor just raked in a huge margin before their next quarterly earnings report. All for literally doing nothing.
The only extra work involved with the annual fee is the notice (typically sent 30-60 days in advance), and the additional line item on the statement for the month that it’s charged.
Most Processors Assess Annual Fees in December or Q4
We typically see payment processors charge merchants an annual fee in Q4 (October, November, or December), with December being the most common month.
This timing isn’t coincidental.
By charging the fee in December, processors ensure they can collect it twice within a 13-month period. You’ll pay at the end of 2025 and then again at the end of 2026. It’s a clever accounting trick that maximizes revenue while minimizing pushback from merchants.
Some processors will even hit merchants with multiple annual fees in Q4. One might hit your account in October under a name like “Infrastructure Upgrade Fee” and then again in December with a more straightforward “Annual Fee.”
Your payment processor is also banking on you being extra busy this time of year. Too busy to pay attention or care about an extra few hundred dollars being charged to your account. Aside from your day-to-day business responsibilities, they know you’ve got year-end tasks, holiday plans, employees taking time off, and dozens of other things to worry about.
How Annual Fees Appear on Your Statements
The actual naming of annual fees can vary across different processors. But they all serve the same purpose (nothing of value to you, and pure profit for your provider).
Let’s look at some of the most common ways annual fees show up on your statement:
- Annual Fee
- Annual Reporting Fee
- Annual Regulatory Fee
- Infrastructure Upgrade Fee
- PCI Annual Compliance Fee
- Annual Administrative Fee
- Annual Account Fee
- Regulatory Assurance Fee
Despite these official-sounding names, all annual fees in payment processing are complete junk. They’re not mandatory, and your processor is just looking for a good excuse to take more money from your account.
What Processors Charge Annual Fees (and How Much They Cost)
Annual fees in payment processing have steadily been increasing year over year. Unfortunately, this has become the new normal, and we’re seeing this billing tactic being applied by nearly every major processor.
Another thing that’s crazy about annual fees is that the amounts sometimes vary between accounts within the same processor.
This type of inconsistency proves that the fees are arbitrary. Processors just charge whatever they think they can get away with until you say something.
Here’s how we’re seeing different processors apply annual fees over the last couple of years:
Heartland Payment Systems (Global Payments)
- $410 Annual Reporting Fee per location in 2025
- $245 Annual Reporting Fee per location in 2024
- (Some merchants were still charged $245 in 2025, but most saw the increase)
- $450 Infrastructure Upgrade Fee charged in October 2025
- $254 Infrastructure Upgrade Fee charged in October 2024
Shift4
- $325 Annual Regulatory Assurance Fee in December 2025
- Charged per device (3 device max, capping fee at $975 per year)
- $99 Annual Program Fee per location in 2025 (in Q4)
Global Payments Integrated
- $450 Infrastructure Upgrade Fee charged in September 2025
- Started introducing annual fees across the majority of accounts in December 2024
- Those first notices of upcoming annual fees that we saw didn’t even contain an amount (a sign that all accounts were not being charged equally)
TSYS
- $499 Annual Fee in December 2025
- Sometimes charged as an “Annual Administrative Fee”
North (American Bancard)
- $199 Annual Regulatory Fee in 2025
- $169 Annual Regulatory Fee in 2024
- $145 Annual PCI Fees (charged whether merchant is compliant or non-compliant)
Priority Payments
- $39.95 Annual Fee
- This is one of the lowest annual fees we’ve seen
CardConnect (Fiserv)
- $259.99 PCI Annual Compliance Fee
- We’ve seen this charged on accounts that showed $0 for this fee on their contract (yet they were charged anyway)
PNC Merchant Services (Fiserv)
- $109.95 Annual Fee
- Often comes in a notice about a small rate increase for the coming year
Huntington Bank
- $189 Annual End of Support Device Fee
- This is another Fiserv reseller getting creative with annual fee names
Bluefin
- $50 Annual Fee
- Another one on the smaller side compared to others
Paya
- $150 PCI DSS Annual Fee
- One of the few processors that charges this fee as early as June (instead of Q4)
Infrastructure Upgrade Fee: An Example of Rising Annual Fees Disguised as Another Name
As you can see from the examples above, annual fees can start as low as $40 to $50 and get as high as $500 or easily exceeding $1,000+ when charged per location or per device.
You may have also noticed that some of these annual fees have creative names — and the Infrastructure Upgrade Fee is a perfect example of this.
This clever name is deceptive in several ways. First, it gives merchants the illusion that they’re getting some type of upgrade (they’re not). Two, it allows processors to charge your account for multiple annual fees in the same year.
Look at Heartland (now Global Payments). They hit merchants with a $450 Infrastructure Upgrade Fee in October and then two months later charged those same accounts a $410 Annual Reporting Fee per location.
Beyond the name, this fee deserves special attention because of how it’s changed over time:
- October 2023: $169 (Cayan and TSYS)
- October 2024: $229 (Global Payments)
- October 2024: $254 (Heartland)
- October 2025: $450 (Heartland and Global)
That’s a 77% increase in just one year for Heartland merchants. And remember, these are all Global Payments subsidiaries charging widely different amounts for supposedly the exact same “infrastructure improvements.”
This is getting out of control. At what point will this fee become $1,500 every year?
Why Payment Processor Annual Fees Are Bogus
Annual fees are complete junk. Despite what your processor says these fees are used for, let’s be perfectly clear about what’s really happening here.
They’re Pure Profit: Annual fees go straight into your processor’s pocket. They’re not passed through to the card networks, and they have nothing to do with interchange rates or network assessments.
Zero Added Value: While names like “Infrastructure Upgrade Fee” or “Annual Reporting Fee” sound legitimate, you’re not actually getting any enhanced services, better support, improved technology, or additional features. Your account functions exactly the same way whether you pay this fee or not.
You’re Already Paying Enough: Depending on your volume, you’re likely paying tens of thousands or even hundreds of thousands in processing fees per year. Your processor is already making plenty of money through your account from their markup on every single transaction, and that margin is plenty to cover their operational costs.
Amounts Are Arbitrary: The fact that the same processor can charge different annual fee amounts in the same year to different merchants proves that these charges aren’t based on actual costs that your processor is incurring. They’re just charging whatever they think each account will tolerate without pushback.
They Increase a Ton Every Year: Marginal increases in payment processing are normal. It’s not ideal, but you may go from paying 15 basis points to 20 basis points over a two-year stretch. But it’s not normal for fees to double or triple from one year to the next.
What Can You Do About Annual Fees?
If you receive a notice about an upcoming annual fee or see some version of an annual fee on your monthly statement, call your processor immediately and demand that it be removed.
Be firm, and don’t take no for an answer. Escalate to another service rep if necessary.
Processors are hoping that most businesses just ignore the fee and move on with their day. You’d be surprised how often this fee can quickly be waived or removed from your account if you ask.
You’ll likely have to repeat this process every year. But annual fees are totally negotiable.
What to Do if Your Processor Won’t Remove the Fee
Sometimes processors won’t budge on annual fees. Even after you’ve escalated or hung up and called back, your processor might just keep the fee and tell you that you can terminate your merchant account within 30 or 60 days if you disagree.
First of all, definitely don’t terminate your agreement over something like this. We almost never recommend switching payment processors, and going through the hassle of switching something like a $300 annual fee would be crazy.
You can definitely threaten to cancel and switch with the hopes that your empty threat might be what gets the fee removed. But don’t actually do it.
Fortunately, there are still plenty of other ways to save money on your account. If you focus on those, the savings could offset the annual fee by 10x every month.
We regularly find merchants paying:
- Discount rates that are 0.20% to 0.50% higher than they should be
- Per-transaction fees that can be reduced
- Bogus monthly fees that total more than the annual fee
- Padded assessment fees
Paying a $300 annual fee won’t matter if you can save thousands of dollars every month by addressing these other costs.
Why This Matters More Than You Might Think
I know what some of you are thinking because I’ve had this conversation with plenty of clients. Your business might be processing millions of dollars every year (or every month).
Who cares about $150 or $350? While $500 sounds like a lot to pay for nothing, it’s a drop in the bucket and may not seem like something to lose sleep over.
And you’re right. If it were only $500, then it might not be a big deal.
The problem is that an annual fee is often the sign of a much bigger problem with your merchant account.
When a payment processor is willing to charge you one junk fee, there’s a high probability that there are other junk fees on your account every month. We’ve seen some of these fees being charged as a percentage of your total volume, which translates to tens of thousands in overages every single year.
- Settlement Funding Fees
- Risk Assessment Fees
- Analytics Reputation Management Fees
- Global VPN Fees
- Transaction Network Access Fees
These are just a few examples of literally dozens of junk fees that we find on nearly every account that we audit.
The annual fee might be what causes you to look at your statements a bit closer. But I promise you, it’s probably the least of your worries.
Processors are greedy and the annual fee is a great example of this. They’ll literally overcharge you by $5,000 every month and then still try to collect an extra $200 at the end of every year as a massive cash infusion that ends up being millions in extra revenue when applied across all of their merchant accounts.
How MCC Can Help
You don’t have to deal with these bogus fees on your own. At Merchant Cost Consulting, we save our clients $31 million every year.
We find savings on 96% of statements that we audit, and typically slash rates by 28% on average.
And you can keep your current processor. We won’t ask you to switch providers or change equipment. Everything stays the same. You just pay less.
Here’s how it works:
- We’ll audit your statements for free to identify bogus charges and inflated rates.
- Then we’ll negotiate directly with your provider to secure better terms on your account.
- We’ll continue monitoring all future statements to ensure your processor upholds their end of the deal and doesn’t try to sneak in more bogus fees down the road.
Our service is based on results. So if we don’t save you money, you don’t pay anything.
Get a free audit today to find out how much you can save.