What looks like a small percentage on your processing statement can become a meaningful expense over a full year.
If your business accepts credit and debit cards, you probably know that payment processing has a cost. The harder question is whether you understand each part of that cost—and whether the processor markup is competitive.
A pricing comparison from Mosaic Processing makes that question easier to see. The per-item fee stays at $0.10. The percentage markup drops across every card category in the comparison.
That difference deserves a closer look.
Understand What the Quoted Rate Includes
A processing quote should explain which charges come from the card-payment system and which come from your provider.
With interchange-plus pricing, the processor’s markup is added to underlying interchange and card-network charges. That markup can include a percentage of the transaction amount and a fixed fee for each transaction. Monthly, gateway, equipment and other account fees can also affect the total.
The percentages below represent the processor markup shown in this quote comparison. They are not the total cost of accepting a card payment.
A Side-by-Side Look at the Markup
| Card category | Current provider | Mosaic quote | Reduction |
|---|---|---|---|
| Visa | 0.30% | 0.10% | 20 basis points |
| Visa Debit | 0.30% | 0.10% | 20 basis points |
| Mastercard | 0.30% | 0.10% | 20 basis points |
| Mastercard Debit | 0.30% | 0.10% | 20 basis points |
| Discover | 0.30% | 0.10% | 20 basis points |
| American Express | 0.60% | 0.25% | 35 basis points |
The per-item fee is $0.10 under both providers for every listed card category. In this comparison, the savings come from the lower percentage markup.
These are the terms of a specific comparison, not a universal rate offer. A merchant’s actual quote and potential savings depend on its processing profile and the complete fee schedule.
What 20 or 35 Basis Points Mean in Dollars
One basis point is 0.01 percentage points. A reduction from 0.30% to 0.10% is therefore a reduction of 20 basis points, or 0.20 percentage points.
On each $1,000 of applicable processing volume, that means $2 less in percentage markup. A 35-basis-point reduction means $3.50 less per $1,000.
For a business processing $100,000 a month entirely in the categories receiving the 20-basis-point reduction, the difference would be $200 a month, or $2,400 a year, assuming the same monthly volume.
Consider a different example: $90,000 a month across the listed Visa, Mastercard and Discover categories, plus $10,000 in American Express volume. The monthly percentage-markup reduction would be $180 plus $35, for a total of $215 a month, or $2,580 a year, if that volume and mix remain consistent.
These examples isolate the percentage markup. Because the per-item fee is unchanged, it contributes no additional savings at the same transaction count. Net savings require a comparison of all other fees and terms.
Compare the Full Statement
A lower markup is a useful starting point. To understand what it means for your business, compare both providers using the same sales volume, transaction count and card mix.
Ask these questions before making a change:
- Does the quoted percentage represent processor markup or an all-in processing rate?
- Are interchange and card-network charges passed through separately?
- Are there different markups by card brand or transaction type?
- What monthly, gateway, PCI-related, batch or equipment fees apply?
- Are there minimums, contract commitments or termination costs?
- Will the solution support your existing checkout, reporting and funding needs?
The most useful comparison shows the expected total monthly cost under each option, with the assumptions clearly stated.
Put Your Own Numbers to Work
You work hard for every sale. Understanding what happens to that revenue after the payment is just as practical as reviewing any other recurring business expense.
Mosaic Processing can help you review your statement, understand the markup and evaluate a side-by-side quote using your business’s actual processing activity.
Start a statement review with Mosaic Processing. Bring a recent statement, and let’s make the numbers easier to understand.