--- title: "Debit vs. credit card processing fees for merchants (and how to cut both)" date: "2026-11-09T18:04:00" url: "https://www.godaddy.com/resources/skills/debit-card-vs-credit-card-fees-for-merchants" --- # Debit vs. credit card processing fees for merchants (and how to cut both) Accepting different payment options, such as Tap to Pay, cash, or Pay Links, meets your customers where they're at, providing a faster and better checkout experience, and ensuring you never miss a sale. However, different payment methods have different processing fees, so it's crucial to know the differences between debit card and credit card processing fees, and how they can impact your business and your customers. For merchants processing dozens or thousands of payments each month, the gap between debit and credit processing fees can turn into a meaningful hit to profit margins. Understanding what drives debit and credit card processing fees can help you make smarter payment decisions, manage costs, and keep more of every sale. ## Debit card vs credit card fees comparison When you accept card payments, debit and credit cards don't cost you the same amount, and the gap comes down to the following key factors - How the fee is structured - How much it typically costs - How fast you get paid - How much risk you are taking on Here's the simple breakdown. Debit Card Credit Card Interchange fees Debit interchange fee capped at $0.21 + 0.05% Credit average 2%, expect higher fees for rewards cards like American Express Typical cost range **Flat-rate pricing:** The processor charges the same stated rate regardless of the card's underlying interchange fee, for example ~2.3% + 0¢ to ~2.9% + 30¢ per transaction.**Interchange-plus pricing:** The customer pays the card's **interchange fee + the processor's markup**. For example, a rate advertised as **0.40% + 8¢** means **interchange + 0.40% + 8¢**, not 0.40% + 8¢ total. The final cost therefore varies depending on the card type and its interchange fee. Settlement speed Usually settled and funded faster. Often within a day Can take several days to settle and land in your account Fraud liability Card issuers may pass some fraud-related costs back to the merchant or cardholder Card issuers more commonly absorb the cost of fraudulent charges themselves Chargeback risk Less common More frequent, and can be time-consuming and costly to resolve Debit cards tend to cost less per transaction, settle faster, and come with fewer chargebacks, while credit cards cost more but shift more fraud risk away from you. That trade-off is exactly why many merchants end up wanting a way to balance the two. ### GoDaddy Payments fees GoDaddy Payments uses flat-rate pricing with in-person transactions at 2.5% + 0c, or 2.3% + 0c with Point of Sale Plus plan ($28.99/mo billed annually), with no fixed per-transaction fee (like a 15c per transaction many other POS providers have). With optional Rate Saver, you get as low as 0% for credit card transactions with surcharge and discounted debit rates at just 1.9% + 0c. [Compare the best payment processing companies and their processing fees](https://www.godaddy.com/resources/ca/payments/benefits-of-a-pos-system-beyond-processing-transactions) Transaction Channel Standard Fees with No Subscription Fees GoDaddy Payments Subscription Plan GoDaddy Payments Subscription Plan with Rate Saver In-person Credit & debit: **2.5% + 0¢** Credit & debit: **2.3% + 0¢** (Point of Sale Plus)Credit & debit: **2.5% + 0¢** (Invoicing and Pay Links Plus) Credit: **0%**Debit: **1.9% + 0¢** Invoicing or Pay Links Credit & debit: **2.9% + 30¢** Credit & debit: **2.8% + 30¢** Credit: **0%**Debit: **2.7% + 0¢** Manual Entry / Virtual Terminal Credit & debit: **3.5% + 0¢** Credit & debit: **3.5% + 0¢** Credit: **0.5%**Debit: **3.5% + 0¢** Online Store (with an applicable ecommerce site through [AI Website Builder](https://www.godaddy.com/websites/ai-website-builder), or uses GoDaddy Payments WooCommerce Plugin) Online Store:Credit & debit: **2.7% + 30¢**WooCommerce Store:Credit & debit: **2.9% + 30¢** Online Store:Credit & debit: **2.7% + 30¢**WooCommerce Store:Credit & debit: **2.9% + 30¢** **Not applicable** ## How does debit card processing work? When a customer pays with a debit card, the transaction moves quickly through several steps: 1. The customer inserts, taps, or enters their debit card details at checkout. 2. The payment processor sends the transaction information through the card network to the customer’s issuing bank. 3. The issuing bank confirms that the linked bank account has enough available funds, then approves or declines the purchase. 4. Once approved, the customer sees the charge reflected in their account, and the transaction is queued for settlement to your merchant account. Credit card processing follows a similar path, but the issuing bank verifies the customer’s available credit instead of their available cash. Credit card transactions typically take one to three business days to settle in your merchant account. ## How much does debit and credit card processing cost? Debit card processing generally costs about 2.3-2.9% per transaction, while [credit card processing fees](https://www.godaddy.com/resources/skills/credit-card-processing-fees) often fall between 1.5% and 3.5%. Your actual cost depends on factors like the card type, sales channel, business risk, and your processor’s pricing model. Flat-rate processors charge one predictable rate for each transaction, often as a percentage plus a fixed fee. That simplicity can make budgeting easier, but it can also mask the lower interchange costs typically associated with debit cards. GoDaddy Payments takes a different approach for in-person transactions: its fee is percentage-based, with no fixed per-transaction charge. Interchange-plus pricing separates the underlying interchange cost from the processor’s markup. Since debit interchange is usually lower than credit interchange, this model can make the cost difference between card types more visible. Tiered pricing groups transactions into rate categories, which can be easier to read but offers less transparency into the costs behind each payment. ## Why are debit card processing fees lower than credit card fees? Debit card processing fees are generally lower than credit card processing fees because payments draw on money already in the customer’s bank account. Credit card issuers extend credit, manage added repayment and fraud risk, and often fund cardholder rewards, which can lead to higher interchange costs. That variation can make card-type pricing harder to forecast, especially when a customer uses a premium rewards card or American Express. GoDaddy Payments keeps in-person pricing predictable with one flat rate across card types: 2.5% + 0¢ per transaction, or 2.3% + 0¢ with Point of Sale Plus. GoDaddy Payments offers the lowest fees in the industry, and the lack of a fixed per-transaction charge can add up for high-volume merchants. A 15¢ transaction fee charged by another processor would cost $150 across 1,000 sales, on top of its percentage-based processing rate. ## How to save on debit and credit card processing fees Payment processing fees are part of accepting card payments, but some payment tools can help reduce their impact on your margins. Credit card surcharging and discounted debit rates are two ways to manage costs while continuing to offer customers convenient ways to pay. ### Save fees through surcharging Credit card surcharging passes an eligible processing fee to the customer at checkout. This can lower your credit card processing costs, but it does not apply to every payment type. U.S. merchants cannot add a surcharge to debit or prepaid card purchases, so a lower debit card rate is especially valuable. ### Get credit card surcharging and discounted debit card rates with GoDaddy Rate Saver [GoDaddy Payments](https://www.godaddy.com/payments) customers can save over 50% more on the industry’s lowest processing rates1 with [Rate Saver](https://www.godaddy.com/help/enabling-rate-saver-41781). Rate Saver helps eligible merchants offset credit card processing costs through credit card surcharging2 and access discounted rates for eligible debit transactions. Together, these options give customers more ways to pay while helping your business retain more of each sale. You can use Rate Saver with [GoDaddy Point of Sale](https://www.godaddy.com/payments/point-of-sale) Plus or [Invoicing](https://www.godaddy.com/payments/invoicing) and [Pay Links](https://www.godaddy.com/payments/pay-links) Plus Plan to get credit card processing fees as low as 0% through surcharging, plus reduced debit rates where available. Interested in saving more on processing fees? Contact a GoDaddy Payments expert to get a detailed savings report with a free Smart Terminal POS device3 (up to $399 value). Custom rates may be available. ## Credit and debit card processing fees FAQ
Do debit cards have processing fees? Yes. Even though a debit card pulls money straight from a checking account instead of extending credit, the card networks and issuing banks still charge merchants a fee every time one is swiped, tapped, or keyed in. That fee is usually smaller and flatter than a credit card fee, because debit transactions carry less risk for the bank. GoDaddy Payments charges one transparent flat rate, 2.3% + 0¢ for in-person transactions on the Point of Sale Plus plan (or 2.5% + 0¢ without a plan), so you're never guessing which card type costs you more.
Why are debit card processing fees lower than credit card fees? Debit fees are lower mainly because they carry less risk for the bank. With debit, the bank confirms there's real money in the account before approving the sale. With credit, the bank is fronting money and absorbing more fraud and non-payment risk, plus funding rewards programs, and that cost gets built into the higher rate. GoDaddy's flat-rate pricing already reflects this difference, and Rate Saver lets eligible merchants push credit card fees to 0% while still getting a discounted rate on debit at 1.9% + 0¢per in-person transaction.*
What is the difference between flat-rate and interchange-plus pricing? Flat-rate pricing charges you the same percentage on every transaction, no matter the card type. Interchange-plus pricing charges the wholesale interchange fee set by the card networks, plus a markup on top, so your rate moves depending on which card the customer uses. Flat-rate is easier to predict, whereas interchange-plus can be cheaper in some cases but harder to forecast. GoDaddy Payments uses flat-rate pricing specifically so merchants can budget with confidence instead of reading a rate sheet every month.
Can I charge customers a fee for using a credit card? In most U.S. states, yes, this is called surcharging, and it's a legal, increasingly common practice. Rules on how much you can add and how you must disclose it vary by state and card network, so it's worth confirming your state's requirements before you start. GoDaddy Rate Saver automates this for you and applies a compliant surcharge to credit card transactions so you pay as low as 0%, with discounted debit rates at 1.9% + 0¢ per in-person transaction.
Can I charge customers extra for using a debit card? Generally, no. Federal rules restrict surcharging debit and prepaid card purchases in the U.S., even in states where credit card surcharging is allowed.* That's why a discounted debit rate, not a debit surcharge, is the standard way merchants offset debit costs. GoDaddy Rate Saver is built around exactly that with surcharge on eligible credit transactions, and discounted rate on debit instead.
How do I lower my credit and debit card processing fees? The two levers are your base rate and how you handle the cost split between card types. Start by choosing a transparent flat-rate processor over one with variable interchange-plus pricing, then layer on a surcharge program if it fits your business and state rules. GoDaddy Payments combines both with a flat 2.3% + 0¢ in-person rate with the Point of Sale Plus plan (2.5% + 0¢ without a plan), with optional Rate Saver to help you save more with as low as 0% credit card fees and discounted debit rates.
How do I know if my processor charges flat-rate or interchange-plus pricing? Check your monthly statement. Flat-rate processors show one consistent percentage across every transaction. Interchange-plus statements show a different rate for nearly every line, because you're being charged interchange plus a markup that varies by card type and network. If your statement looks different every month even though your sales are steady, you're likely on interchange-plus. GoDaddy Payments publishes one flat in-person rate, so there's nothing to decode. This is also why you should always calculate your effective rate by dividing your overall fee by revenue.
Is a debit card or credit card more secure to accept as a merchant? Both are secure when processed through a PCI-compliant processor, but the risk sits in different places. Debit card fraud losses are more often passed back toward the merchant or cardholder, while credit card issuers more commonly absorb fraud costs themselves. Chargebacks are also less common on debit than credit. GoDaddy Payments processes every transaction, debit or credit, through the same secure, PCI-compliant infrastructure.
Does it cost more to accept a rewards or travel credit card than a regular credit card? Yes, on most processors. Premium cards like travel, rewards, and business cards carry higher interchange rates because they fund cardholder perks, so interchange-plus processors charge more when a customer taps a rewards card. GoDaddy Payments' flat rate never changes based on card type, so a rewards card costs you the same as any other card type.
How long does it take to get paid for debit card vs. credit card transactions? Debit transactions typically settle and fund faster than credit, since there's no line of credit to reconcile. Credit transactions can take a few extra business days depending on your processor and bank. GoDaddy Payments offers Same-Day and Instant Payout options if you need funds faster than standard deposit timing, regardless of whether the sale was debit or credit.
Are there hidden fees in debit or credit card processing I should watch for? Common ones include monthly minimums, PCI compliance fees, early termination fees, and statement or batch fees that don't show up in the advertised rate. These add up fast and make two processors with similar headline rates cost very differently in practice. GoDaddy Payments publishes its flat rate and fixed fee upfront, with no monthly minimum and no long-term contract required.
What happens if a customer disputes a debit vs. credit card charge? The dispute process is similar for both: the card network investigates, and the merchant has a window to respond with evidence. Credit card disputes tend to happen more often and can take longer to resolve than debit disputes.
***Disclaimers***: ***1 Lowest transaction fees compared to similar plans from Square, Shopify, and Stripe for card-present and ecommerce card transactions.*** ***2 Requires subscription to a plan. A credit surcharge is not available in all U.S. states. Not currently available for ecommerce transactions. Rate savings based on the average GoDaddy Payments customer transaction distribution. Actual rates may vary.*** ***3 Free Smart Terminal Duo or Flex offered to merchants with confirmed in-person credit card transactions greater than $100,000 annually (avg. $8,333/mo.) as shown in previous months’ processing statements. Or get a free Smart Terminal Flex with the purchase of an annual Point of Sale Plus plan subscription, which is non-refundable. The plan will automatically renew at $347.88 unless you cancel by visiting My Account.***