If you accept card payments on a Clover POS system, a slice of every sale goes to processing fees. The problem is that slice is rarely a single, obvious number. According to Clover's own credit card processing guide, what you pay is actually three separate fee types charged by three different parties. Once you know what each one is, your monthly processing statement starts to make a lot more sense.
Fee Type 1: Interchange Fee (the wholesale fee)
The interchange fee is the wholesale cost of moving money from the customer's bank to yours. It is collected by the cardholder's bank — the issuing bank — and the rate is set by each card network (Visa, Mastercard, American Express, Discover). It typically takes the form of a percentage of the sale plus a small fixed amount per transaction.
Key facts:
- It is non-negotiable. No processor can lower the interchange rate for you; it is the same regardless of who processes the payment.
- It is usually the largest part of your processing cost. It covers the bank's cost of handling the transaction plus the risk of approval, fraud, and bad debt.
- It varies by card type. Premium and rewards credit cards carry higher interchange rates than basic cards. Clover's guide puts the average US interchange rate at roughly 1.8% for credit cards and 0.3% for debit cards — Canadian rates differ slightly, and Interac debit is priced separately, so treat these as a benchmark.
Because interchange applies to every card transaction, it is the baseline cost everything else is built on.
Fee Type 2: Assessment (Service) Fee
The assessment fee — sometimes called a service fee — is charged by the card network itself, not the bank and not your processor. Like interchange, it is non-negotiable.
It is typically a small percentage of each transaction, and the exact amount can shift based on your transaction volume and the risk level the card networks assign to your business. It is small enough that it rarely drives the total cost on its own — think of it as the card networks' toll for using their rails.
Fee Type 3: Processing Fee (the processor markup)
This is the fee charged by your payment processor — the company that moves transaction data between your Clover terminal, the card networks, and the banks. Clover's guide calls it the payment processor markup, and unlike the first two, this one can be negotiated.
The markup varies depending on the processor's pricing plan, which is why two businesses with identical sales can pay noticeably different total rates. It is the one line item where comparing providers, asking questions, and negotiating terms actually pays off.
How the three fees combine: pricing models
Processors do not always show the three fees separately. Clover's guide outlines four pricing models, and each bundles the fees differently:
- Flat rate: One fixed rate for everything (e.g., 2.9% + $0.30). Simple, but you get no discount on low-cost cards, so you may overpay on cheaper transactions. Note that card-present sales usually carry a lower flat rate than card-not-present ones because they carry less risk.
- Tiered: Transactions are sorted into qualified, mid-qualified, and non-qualified buckets based on card type, risk, and your volume. A qualified transaction clears at a lower rate than a non-qualified one. This model is the most complex and the hardest to audit.
- Interchange plus: The most transparent model. You pay the actual interchange and assessment costs, plus a fixed processor markup shown separately (for example, interchange + 0.30% + $0.10).
- Subscription: A flat monthly fee plus a small per-transaction charge, with wholesale costs passed through separately.
If your statements never break out interchange from markup, ask for interchange-plus pricing — the easiest way to see what is negotiable.
Three ways Clover merchants can keep fees down
1. Negotiate the markup, not the wholesale. Interchange and assessment are fixed. The processor markup is the only fee you can move, so that is where your negotiating effort belongs. 2. Reduce card-not-present transactions where you can. Keyed-in and online transactions cost more than in-person chip or tap sales because the fraud risk is higher. For restaurants, that means encouraging in-person payment over phone orders whenever possible. 3. Match the pricing model to your sales mix. A café doing mostly small in-person tap sales and a restaurant doing large catering invoices paid by phone have very different cost profiles. The cheapest headline rate is not always the cheapest total bill.
The bottom line
Every Clover POS transaction carries three fees: the interchange fee (bank, non-negotiable), the assessment fee (card network, non-negotiable), and the processor markup (negotiable). Knowing which is which turns your statement from a confusing lump sum into a breakdown you can act on.
Running a restaurant in Edmonton, Calgary, or the GTA? Sevenflow helps Canadian restaurants get on Clover with the right pricing model for their business. Explore Clover POS solutions or contact Sevenflow to learn more.
Source: Clover, “Credit Card Processing 101: The All-You-Need-to-Know Guide”