What are transaction fees?

Point of Sale (POS) Glossary

Transaction fees are the charges that a business must pay for processing a customer’s electronic payment. When a buyer uses a credit or debit card at a point of sale terminal, a payment processor may charge a transaction percentage plus an additional fixed amount. These fees are not limited to POS terminals and must also be paid for online, phone, and mail purchases.

A per-transaction fee covers an acquirer and processor fees and generally are a few percentages of the purchase plus a set amount. Additional fees may apply, for instance, if a transaction is international and may also apply even if a transaction is rejected and does not go through. For this reason, plus concerns about fraud, merchants may offer a discount for cash.