How do I find my total card volume?

It is listed on your monthly merchant statement, usually in a summary section near the top. Use gross card sales processed for the period.

What is a good effective rate?

There is no single answer. It depends on your card mix, average ticket, and how you accept cards. In-person transactions generally cost less than keyed or online transactions. Compare against your own past statements and offers based on your own data.

Should monthly fees be included in the effective rate?

Yes. Include every fee on the statement, including monthly, statement, gateway, and PCI fees, so the number reflects what you actually pay.

Why does my effective rate change month to month?

Card mix, average ticket size, the share of keyed or online sales, and fee schedule updates can all move it. Under interchange-plus pricing your markup stays fixed, but the underlying interchange varies.

Payment ProcessingNovember 7, 20265 min read

How to Calculate Your Effective Rate: A Worked Example

Your effective rate is the single number that shows what you really pay to accept cards. Here is the formula, a worked example, and how to read the result.

By ONKORE Team

Illustration for How to Calculate Your Effective Rate: A Worked Example

What is an effective rate?

Your effective rate is the total you paid in processing costs, divided by the total card sales you processed, shown as a percentage. It is the only number that captures everything: interchange, network fees, your processor's markup, and monthly or other fees.

The formula

Effective rate = total fees paid ÷ total card volume × 100

Worked example

The numbers below are illustrative, not a quote.

| Line item from the statement | Amount | |------------------------------|--------| | Total card volume for the month | $40,000.00 | | Interchange and network fees | $860.00 | | Processor markup | $120.00 | | Monthly, statement, and other fees | $35.00 | | PCI fee | $0.00 | | Total fees | $1,015.00 |

Effective rate = $1,015 ÷ $40,000 = 0.025375, which is about 2.54%.

What to include

Include every fee on the statement, not just the percentage rate. Monthly fees, statement fees, gateway fees, and PCI fees all count.
Use card volume, not total revenue. Cash and checks are not part of the calculation.
Do not subtract refunds from the fees you paid unless the statement shows the fees returned.

What your result means

An effective rate by itself is not good or bad. It depends on your average ticket, your card mix, and how you accept cards. Card-present transactions generally cost less than keyed or online ones, and large tickets spread fixed per-transaction fees more thinly.

Use your effective rate to:

Track change over time. If it rises with no change in your business, find out why. See why your processing fees went up.
Compare offers. Ask any processor to estimate your effective rate using your own statement, not a sample.
Spot buried fees. A low advertised rate with a high effective rate usually means extra fees.

Try it with your own numbers

Use our pricing calculator to model your volume and average ticket. It uses estimates for network fees, so treat the result as a guide. For an exact comparison, send us a recent statement for a free review.