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By ActivityPay
You're paying way more than the rate your payment processor quoted you. That clean "2.9% + 30¢" they advertised? It's just the tip of the iceberg, and most tour operators have no idea what's actually getting deducted from every booking.
The real cost structure has three layers: interchange fees (what Visa and Mastercard charge), assessment fees (what the card networks take), and processor markup (what your payment company keeps). Understanding these layers is the difference between accepting your monthly statement at face value and actually knowing if you're being overcharged.
Here's what you're actually paying and how to spot when you're getting a raw deal.
Interchange is the wholesale cost of accepting card payments. It goes directly to the bank that issued your customer's credit card, and every processor pays the same interchange rates. Visa and Mastercard publish these rates publicly, though they're buried in 300-page PDF documents that change twice a year.
For tour operators, interchange rates typically fall between 1.51% and 2.95% depending on card type and how the transaction is processed. Here's the breakdown:
When someone books a zip line tour with their basic Chase Visa, you're paying around 1.51% + 10¢ in interchange. Debit cards are even lower at 0.05% + 22¢ for regulated cards. These are your cheapest transactions to process.
Most of your customers use rewards cards because they're booking travel. These cards cost you 1.95% to 2.40% in interchange, plus 10¢ per transaction. The card-issuing bank uses your interchange fees to fund their cashback and travel points programs. You're subsidizing your customer's rewards.
Corporate bookings and premium cards (think Amex Platinum or business credit cards) hit you with 2.70% to 2.95% interchange rates. When that corporate team-building group books with a company card, you're paying top-tier interchange even though the booking size is larger.
The rate you pay depends on qualification factors. If you process a card-present transaction with a chip reader at your check-in desk, you qualify for lower "card present" interchange rates. If you manually enter card details over the phone or process online bookings, you're paying "card not present" rates that run 0.30% to 0.50% higher.
Multi-day tours create another wrinkle. When you charge a deposit months before the activity date, some processors might downgrade that transaction to higher interchange because of the delayed fulfillment. The same booking could cost you 1.95% in interchange or 2.60% depending on how your system codes it.
On top of interchange, Visa and Mastercard charge assessment fees for using their networks. These typically add another 0.13% to 0.15% to every transaction. For a $500 booking, that's an extra 65¢ to 75¢ that has nothing to do with your processor's markup.
Amex charges higher assessment fees, usually around 0.15% to 0.17%, which is part of why American Express costs more overall. These fees are non-negotiable and identical across all processors.
Everything above interchange and assessments is your processor's markup. This is the only part of your payment costs you can actually negotiate, and it's where most tour operators are overpaying without realizing it.
The "2.9% + 30¢" model you see advertised includes interchange, assessments, and processor markup bundled together. Simple to understand, but you're paying the highest possible markup on every transaction.
When you process a basic debit card at 0.05% + 22¢ in interchange, your processor still charges you 2.9% + 30¢. They're pocketing a 2.85% markup on that transaction. On a $200 booking, that's $5.70 in markup when interchange only cost them $0.32.
Smarter operators use interchange-plus pricing where you pay the actual interchange rate plus a fixed markup. Instead of 2.9% flat, you might pay "interchange + 0.40% + 10¢" which means your processor adds 0.40% and 10¢ to whatever the actual interchange rate is.
For that same $200 debit card booking at 0.05% + 22¢ interchange, you'd pay 0.45% + 32¢ total, or just $1.22. That's $5.48 less than flat-rate pricing on a single transaction. Process 1,000 bookings per season and the savings add up fast.
The transparent pricing also lets you see exactly what your processor is making versus what goes to card networks. When you spot a 2.95% charge on your statement, you know it's legitimate premium card interchange, not hidden processor fees.
Your monthly statement should break down every transaction by interchange category. Look for entries like "CPS Retail Debit" or "Card Present Rewards 2" followed by the actual interchange rate charged.
If you see downgrades listed—transactions that failed to qualify for your lowest rates—investigate why. Sometimes it's unavoidable (keyed-in card numbers always downgrade), but often it's a system configuration issue costing you 0.50% extra on every booking.
Calculate your effective rate by dividing total fees by total processing volume. If you're on interchange-plus pricing and your effective rate is above 2.5%, you're either processing mostly premium cards or your processor markup is too high. For most tour operators with a healthy mix of card types, effective rates between 2.0% and 2.4% are realistic.
Understanding these fee structures changes how you think about payments. Encouraging customers to pay with debit cards saves you money, but it's not worth complicating your booking experience. The 0.30% difference on a $300 booking is just $0.90.
What matters more is making sure your payment system qualifies transactions at the lowest possible interchange tier. Getting payments to work with your booking system in a way that passes proper transaction data—like the activity date and booking details—keeps you out of higher "downgraded" interchange categories.
For larger bookings, the percentage-based costs hurt more. A $5,000 corporate group booking at 2.5% effective rate costs you $125 in fees. Some operators build payment costs into their pricing, while others prefer to absorb the cost to keep advertised prices clean. Either approach works as long as you've done the math and know your true margins.
Pull your last three months of processing statements and calculate your effective rate. If you're paying flat-rate pricing and processing over $50K monthly, you're almost certainly overpaying. Even moving to interchange-plus with a 0.50% markup would save you thousands annually.
When comparing processors, ignore the advertised rates and ask for their interchange-plus pricing. A processor offering "interchange + 0.30% + 8¢" is likely cheaper than one offering "2.7% flat" even though 2.7% sounds lower than 2.9%.
The goal isn't to eliminate payment processing costs—you can't—but to pay only what's necessary. Understanding interchange means you'll never again wonder if that 2.8% charge on a transaction is legitimate or if your processor is taking more than their fair share.
Flat-rate pricing (like 2.9% + 30¢) bundles all fees together, meaning you pay the same rate regardless of card type, and processors keep larger markups on cheaper transactions. Interchange-plus pricing charges you the actual card network rate plus a fixed processor markup (like interchange + 0.40% + 10¢), which is typically much cheaper and more transparent, especially for debit cards and basic credit cards.
Rewards cards charge higher interchange fees (1.95% to 2.40% vs. 1.51% for basic cards) because card-issuing banks use these fees to fund cashback and travel points programs. Essentially, merchants subsidize the rewards that customers earn when they use these premium cards.
Calculate your effective rate by dividing total fees by total processing volume—for tour operators, rates between 2.0% and 2.4% are realistic with a good card mix. Review your statement for breakdowns by interchange category and look for excessive downgrades, which indicate you're paying higher rates than necessary due to how transactions are being processed.
Transactions get downgraded when they don't meet qualification requirements for lower rates, such as manually entering card details instead of using a chip reader, or when proper transaction data isn't passed through. For tour operators, deposits charged months before the activity date can sometimes trigger downgrades, costing an extra 0.30% to 0.50% per transaction.
No, assessment fees charged by Visa, Mastercard, and Amex (typically 0.13% to 0.17%) are non-negotiable and identical across all processors. The only part of your payment costs you can negotiate is the processor markup—everything above interchange and assessment fees.