Effective rate explained

Effective rate is a practical way to estimate what a business is paying overall for card acceptance. It is calculated as total processing fees ÷ total processed volume over a statement period.

Why effective rate matters

It reflects the total cost, including fixed monthly fees and per-transaction fees
It helps compare statements over time
It avoids relying only on advertised percentages

What to include in “total fees”

Processing fees (discount, interchange, network)
Per-transaction fees (auth/txn, batch)
Gateway or platform fees (if applicable)
PCI and statement fees

Common pitfalls

Comparing effective rate across months with different card mix or channels
Ignoring fixed fees when volume changes
Leaving out chargeback and retrieval costs when they occur

Related: Pricing models, Interchange-plus

Compliance note: ClearRate Payments is not a bank. Payment processing services are provided through sponsoring banks and processing partners.