Hidden Fees in Dealership Payment Processing: What to Watch For

That "1.8%" rate you were quoted? It's rarely the whole story. Payment processing has more hidden fees than a rental car agreement. Understanding where they hide helps you negotiate them away — or avoid processors who pad their profits with obscure charges.

Here's what to watch for.

The Fee Anatomy

Payment processing costs have three layers:

1. Interchange: What card networks charge (fixed, non-negotiable) 2. Assessment fees: What Visa/Mastercard charge (fixed, small) 3. Processor markup: What your processor charges (negotiable, variable)

Hidden fees almost always sit in layer 3. That's where processors make extra margin.

Common Hidden Fees

Monthly Statement Fee

What it is: A fee just for sending you a statement.

Typical amount: $5-25/month

What to do: Ask to have it waived or reduced. Many processors will remove it to win your business.

Monthly Minimum Fee

What it is: A minimum amount you must pay in processing fees each month. If your actual fees are less, you pay the minimum.

Typical amount: $25-50/month

What to do: For most dealerships, this doesn't apply (you exceed minimums). But if you have low volume, negotiate it down or away.

PCI Compliance Fee

What it is: A fee for "helping" you maintain PCI DSS compliance.

Typical amount: $10-30/month

What to do: This fee has exploded in recent years. Some processors provide real value (scan services, support). Many just charge the fee for nothing. Ask what you actually get. Negotiate it down or insist on actual services.

PCI Non-Compliance Fee

What it is: A penalty fee if you haven't completed your PCI compliance requirements.

Typical amount: $20-100/month

What to do: Complete your compliance to avoid it. But also question whether the fee itself is reasonable. Some processors charge exorbitant amounts.

Annual Fee

What it is: A yearly fee just for having the account.

Typical amount: $50-200/year

What to do: Many processors don't charge this. If yours does, ask to remove it as condition of signing or renewing.

How Anchorbase Handles This

Anchorbase doesn't pad your bill with unnecessary fees. Our pricing is transparent — you know what you're paying for and why. No PCI fees for non-existent services, no statement fees, no surprise charges.

See how it works

Batch Fee

What it is: A fee each time you close (batch) your daily transactions.

Typical amount: $0.10-0.35/batch

What to do: At $0.25/day, this is about $90/year. Not huge, but it adds up. Ask to have it included or reduced.

Transaction Fees (Per-Transaction)

What it is: A fee charged on every transaction, in addition to percentage fees.

Typical amount: $0.05-0.25/transaction

What to do: This is often legitimate and expected. But verify it's reasonable. High per-transaction fees eat into small transactions significantly.

Address Verification (AVS) Fee

What it is: A fee for verifying the customer's billing address.

Typical amount: $0.01-0.05/transaction

What to do: For card-not-present transactions (phone, online), AVS is important. But you shouldn't pay excessive amounts. Some processors include it.

Gateway Fee

What it is: A fee for using a payment gateway (often for online/card-not-present).

Typical amount: $10-30/month

What to do: If you need a gateway, some fee may be justified. But many processors include this. Compare options.

Equipment Lease Fees

What it is: Monthly fee for leasing (not owning) your terminal.

Typical amount: $20-100/month per terminal

What to do: Terminal leases are almost always a bad deal. Do the math: $50/month × 48 months = $2,400 for a terminal worth $300-500. Buy your terminals.

Early Termination Fee

What it is: A fee for canceling your contract before it ends.

Typical amount: $200-500 (or remaining contract value)

What to do: Avoid long contracts with termination fees. Month-to-month or short-term agreements are better. If you must sign a contract, negotiate the termination fee down.

Sneaky Rate Padding

Beyond explicit fees, some processors pad rates:

Qualification Downgrades

What happens: You're quoted a rate for "qualified" transactions. But most transactions don't qualify, so you pay more.

Example:

Quoted: 1.65% qualified rate
Reality: Most transactions are "mid-qualified" (2.15%) or "non-qualified" (2.85%)
Your effective rate: Much higher than quoted

What to do: Get interchange-plus pricing. You pay actual interchange plus a fixed markup. No qualification games.

Padded Interchange

What happens: Processor quotes interchange rates that are higher than actual interchange.

Example:

Actual interchange: 1.65%
Processor-quoted "interchange": 1.85%
Invisible 0.20% padding

What to do: Compare quoted interchange to published rates. If they don't match, ask why.

Bill-Back/Enhanced Recovery

What happens: Processor quotes a low rate, then "recovers" higher costs later as additional line items.

What to do: Look at your statement. If you see charges for "downgrades," "bill-back," or similar, your quoted rate isn't your real rate.

How to Spot Hidden Fees

Read the Full Agreement

Before signing:

Request the complete fee schedule
Ask specifically: "What fees will appear on my statement beyond the rate we discussed?"
Get it in writing

Analyze Your Current Statement

If you're already processing:

Add up ALL fees on your statement
Divide by total volume
This is your true effective rate

Compare to what you thought you were paying.

Ask Pointed Questions

Questions that reveal hidden fees:

"What's the all-in effective rate I'll pay?"
"Are there any monthly fees?"
"What happens if I'm not PCI compliant?"
"Are terminals included or extra?"
"What's the termination policy?"

Fee Negotiation Tactics

Use Competing Quotes

Get quotes from multiple processors. Use them as leverage:

"Processor B is offering no monthly fees"
"I'd stay with you if you can match this rate"

Ask for Waiver

Simply asking often works:

"Can you waive the statement fee?"
"I'd sign today if you remove the annual fee"

Bundle

Negotiate fees as part of a complete package:

"I'll commit to three years if you remove monthly fees"
"Include the gateway fee and we have a deal"

Walk Away

Be willing to walk:

If fees are excessive and non-negotiable, find another processor
There are many options
Good processors don't need to hide fees

Red Flags

Be wary of processors who:

Won't provide a complete fee schedule
Quote only a rate without discussing other fees
Get defensive when asked about fees
Have complex, hard-to-understand statements
Push long-term contracts with high termination fees
Insist on equipment leases

What a Clean Statement Looks Like

A good statement shows:

Transaction volume
Interchange fees (or cost basis)
Clear processor markup
Clearly labeled assessments
Minimal or no monthly fees
Easy to calculate effective rate

If your statement is pages of confusing line items, that's a problem.

The Cost of Hidden Fees

Example Scenario

Dealership processing $200,000/month:

Quoted rate: 2.3% Expected monthly cost: $4,600

Hidden fees:

Statement fee: $15
PCI fee: $25
Batch fee: $7.50
Monthly minimum: $0 (not applicable)
Rate padding (0.2%): $400

Actual monthly cost: $5,047.50 Actual effective rate: 2.52%

Annual hidden fee cost: $5,370

That's money going to your processor for little value.

Our Approach

At Anchorbase, we believe in transparent pricing:

Interchange-plus structure (no qualification games)
Clear markup you can see and verify
Minimal fees (and we tell you what they're for)
No long-term contracts required
Your terminals, not leased

You should know what you're paying and why.

Get Transparent Pricing →

Anchorbase won't surprise you with hidden fees. See exactly what you'll pay before you commit — and compare to what you're paying now.