What Is a Cross Border Fee for Credit Card Processing?

Many merchants process credit cards for customers residing outside the United States. The regular fees charged by a merchant’s processor, also known as interchange fees, are too high for these transactions. To compensate, many processors charge an additional fee to offset the cost of processing international transactions. This is what you should expect if you process US cardholder data overseas.

Some processors withhold the fee from your merchant account, but others charge it as an addition to the base rate. As you might suspect, this can make for some confusion when comparing credit card processing quotes across various companies. For example, company A may advertise a flat 5% for all transactions while company B charges 2.5% plus $0.25 per transaction. Company B is the better bargain, but only if you process a high volume of transactions. In this case, company A may actually be cheaper for smaller monthly volumes.

All credit card processors that offer international processing will charge a cross border fee in some form or another. Companies typically do not advertise it because they either add the fee on top of their regular rates or deduct it from your available balance. If you sign up with a low priced provider, cross border fees could actually increase your processing rate. It is best to work with a company that offers competitive rates and discloses all fees so you know exactly what type of deal you are getting.

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