A processing proposal is built to be read in a certain order: the headline rate first, everything else later. Comparing two or three proposals fairly means reading them in a different order—starting with what you will actually pay each month on your real card mix, not the number in large type.
General information for comparing offers. Not legal or financial advice. Read the agreement itself before you sign.
Start with your own statements, not the proposals
Pull your last three monthly statements before you look at any offer. You need three numbers from each month:
- Total card volume (dollars processed)
- Total fees charged (every line, including monthly and per-item fees)
- Number of transactions
Divide total fees by total volume and you have your effective rate—the single most useful number for comparing anything. If a proposal can't be translated into an effective rate on your volume and transaction count, it isn't comparable yet.
Worked example (illustrative assumptions only): a shop processes $40,000 in a month across 800 transactions and pays $1,000 in total fees. Effective rate: $1,000 ÷ $40,000 = 2.5%. Average ticket: $40,000 ÷ 800 = $50. A proposal is only "cheaper" if it lowers that $1,000 on the same $40,000 and 800 transactions.
Not sure where these numbers live on your statement? Our guide to reading a merchant statement walks through it, or send it to us for a free statement analysis.
Line up the pricing model first
Two proposals can quote the same-looking rate on completely different structures. Before comparing numbers, label each offer:
| Model | What the quoted rate means | What to ask |
|---|---|---|
| Interchange-plus | Card-network cost passed through, plus a stated markup | What is the markup—percentage and per-transaction? |
| Flat rate | One rate for most cards | Which cards or entry methods fall outside it? |
| Tiered | Qualified / mid-qualified / non-qualified buckets | Which of my cards land in each tier, and who decides? |
| Surcharge or dual pricing | Some or all card cost shifted to the customer | Who is responsible for staying compliant, and what happens to debit? |
If you want the longer version, see interchange-plus vs. flat-rate vs. tiered pricing.
The fee checklist (where proposals differ most)
The headline rate is rarely where offers diverge. Ask every provider to fill in the same list, in writing:
- Per-transaction fees: authorization, batch, AVS (address verification) and gateway fees
- Monthly fees: statement, account, PCI program, gateway, and any monthly minimum
- PCI non-compliance fee: the amount, and what you have to do to avoid it
- Chargeback and retrieval fees: per occurrence
- Equipment: purchase, rental or lease—and who owns it at the end
- Annual or one-time fees: setup, annual, "regulatory" or "technology" fees
- Funding: how quickly deposits land, and whether next-day funding costs extra
Anything left blank is a fee you can't compare. Ask again until it's filled in or stated as zero.
Read the contract terms, not just the pricing page
The cheapest proposal on paper can be the most expensive to leave. Check:
- Term length and whether it renews automatically
- Early termination: a flat fee, or "liquidated damages" calculated on your future volume
- Rate-change language: can pricing change during the term, and how much notice do you get?
- Equipment lease: is it a separate, non-cancellable contract with its own term?
- Who you actually contract with: the sales company, the processor, the bank—or all three
A low rate with a four-year non-cancellable equipment lease attached is not a low-cost offer.
Compare on one page
Once each proposal is fully filled in, run it against your own three months:
- Projected total monthly cost on your volume and transaction count
- Projected effective rate
- One-time and exit costs over the term
- What changes for your customers (surcharge or dual pricing)
- Service: who you call, and how disputes and chargebacks are handled
Our processor comparison page lays out the questions side by side. If you already have a proposal in hand, we'll review the full cost with you—including offers that aren't ours.
Quick answers
What is an effective rate?
Your total processing fees for a period divided by your total card volume for the same period. It folds every fee into one percentage, which makes different pricing models comparable.
Is the lowest quoted rate always the cheapest proposal?
No. Monthly fees, per-transaction fees, equipment terms and early-termination costs can outweigh a lower headline rate. Compare total projected cost on your own volume.
Should I compare proposals using my statements?
Yes. Use your last three months of volume, transaction count and total fees so every proposal is priced against how your business actually runs.
This article is general information, not legal or tax advice. Card brand rules and state laws change; confirm your setup before you launch a pricing program.