Markup

Also called processor markup, spread, margin, the plus

The part of your processing cost that goes to your processor and agent. It's the only part that's negotiable, and usually the only part that's hidden.

What it is

Markup is everything you pay above interchange and network assessments. It is the processor's and agent's entire compensation on processing, and it is the only component of your cost that any human being can change. On interchange-plus pricing, the markup is a stated number: 30 basis points and 10 cents, for example. On tiered, blended or flat-rate pricing, the markup is whatever's left after interchange and assessments come out of your effective rate - a number that exists but is never printed. The full markup is broader than the discount rate. It includes the percentage spread, the per-item spread, and the fixed monthly fees - statement, minimum, PCI, regulatory, risk, gateway. A processor quoting 15 basis points with $57 a month of fixed fees on a $20,000 merchant has a real markup of about 43 basis points. Judging markup by the percentage alone is how merchants end up comparing offers that aren't comparable. Calibration, since almost nobody publishes it: wholesale buy rates run about 5-10 basis points plus $0.02-$0.05 per transaction. A 25-40 basis point all-in markup is a normal, sustainable margin for a fully-serviced small merchant account. Under 25 is aggressive. Over 60 needs a specific justification - high risk, real software, genuine field service.

Why it matters to your business

Markup is the entire negotiation. Interchange and assessments are the same for you and for the shop next door; the only thing that differs is what your processor adds. On $50,000 a month, moving from a 75 basis point all-in markup to 35 is $200 a month, $2,400 a year. And knowing the number changes the relationship. A processor whose markup is published cannot quietly raise it. A processor whose markup is invisible can, and does - which is exactly what merchants experience as effective rate drift over two or three years with no notice they'd recognize.

Where it gets contested

The core dispute in merchant services is not whether processors should earn a markup. It's whether merchants should be able to see it. The industry's argument against disclosure is competitive: publish your markup and you invite commoditization, and commoditized processing means nobody funds local service, integration help or the person who answers the phone at 7pm. There is something to that. The race to the bottom in this industry has produced genuinely bad service alongside genuinely low prices. But the argument proves too much. Interchange-plus disclosure has been standard for large merchants for decades and those relationships still have service, integration and support - they're just priced explicitly. What disclosure actually eliminates is the ability to charge two merchants wildly different markups for identical service based on nothing but which one asked fewer questions. That's the practice being defended, and it's worth naming. What processors don't say: markup is where every reduction lands too. The 2026 settlement's 10 basis point interchange cut only reaches a merchant whose markup is stated separately. If markup is fused into a blended number, network savings become margin silently, and the merchant never knows a price change occurred.

How to check it yourself

Compute your all-in markup: effective rate minus your true interchange plus assessments. Get interchange from the interchange detail page; assume assessments around 0.13%-0.15% if not itemized. The remainder is markup. Then convert every fixed monthly fee to basis points and add them in - that's the real number, and it's the one to negotiate.

Receipts

Claims above that are checkable, with where to check them. Published so you do not have to take anyone's word for it.

Representative wholesale buy rates run 5-10 bps + $0.02-$0.05 per transaction
strictlyzero.com ↗
Visa and Mastercard assessments run approximately 0.13%-0.15% of volume
strictlyzero.com ↗
An honest disclosure standard shows interchange and assessments as true pass-through with the markup stated as a discrete number
ftc.gov ↗
Interchange reductions reach merchants only where pricing passes through; processors sitting in between control it
merchantcostconsulting.com ↗