Understanding the Fees
Before you can reduce them, it’s important to understand where processing fees come from. When a customer pays with a credit card at the pump, several parties take a cut:
| Fee Type | Who Collects It | Typical Range |
| Interchange Fee | Card-issuing bank (e.g. Chase) | 1.30% – 2.50% |
| Assessment Fee | Card network (Visa/Mastercard) | 0.11% – 0.15% |
| Processor Fee | Merchant service provider | $0.05 – $0.15 + % markup |
| Authorization Fee | Payment gateway | $0.01 – $0.10 per swipe |
Implement Dual Pricing (Cash Discount Program)
One of the most effective ways to offset credit card fees is by offering dual pricing: one price for cash, another for credit.
How it works: The posted price is the cash price. When a customer uses a card, the system applies a small service fee (often 3%–4%) to cover processing costs.
Benefits: You maintain your margins and make fees transparent to customers.
Legal Note: Dual pricing is legal in all 50 states, but implementation must follow clear signage and disclosure rules.
Example: A $3.50 cash price becomes $3.63 with card.
Choose the Right Processing Plan
There are typically three pricing structures offered by processors:
– Tiered Pricing: Simplifies fees into “qualified,” “mid-qualified,” and “non-qualified” transactions—but often hides true costs.
– Flat Rate (e.g., 2.49% + $0.10): Predictable, but not always cheapest for high-volume or low-ticket fuel sales.
– Interchange Plus: Transparent and ideal for stations pumping high volumes. You pay actual interchange rates plus a small markup.
Best for pumps: Interchange Plus, paired with a processor familiar with petroleum.
Avoid Overpaying on Fleet Cards
Fleet cards (like Voyager, WEX, EFS) can carry processing fees as high as 4%–6%. Ensure:
– Your Point of Sale system (POS) is certified for fleet transactions through Buypass or similar low-cost networks.
– You’re using a processor that routes fleet cards efficiently (many don’t).
Tip: If you’re only accepting Visa/Mastercard, you might be missing out on commercial customers.
Use an Integrated EMV Payment System
Non-Europay MasterCard and Visa (EMV) compliant sites pay higher rates due to increased fraud risk. Upgrading to EMV:
– Lowers liability from chargebacks.
– Unlocks lower interchange fees for secure chip transactions.
Look for POS systems that integrate directly with Original Equipment Manufacturer (OEM) dispensers or retrofit options that support EMV without costly hardware replacements.
Negotiate Monthly Fees and Batch Fees
Don’t overlook the small, recurring charges:
– Monthly minimums
– Batch fees
– Payment Card Industry (PCI) compliance charges
– Statement fees
These can often be waived or reduced – especially if you’re processing significant volume or bundling services like point-of-sale and processing.
Avoid Leasing Payment Equipment
Leasing terminals or site controllers can trap you in long-term contracts that cost far more than buying outright.
– Always compare the total cost of ownership over 3–5 years.
– Ask about early termination fees and who owns the equipment.
Track Your Effective Rate
Use this formula to evaluate your current processor:
Effective Rate = (Total Fees ÷ Total Volume) × 100
If your effective rate is over 3.5%, it’s time to shop around.
Final Thoughts
At the pump, every penny counts. By understanding where your money is going and adopting the right technologies and pricing structures, you can protect your bottom line and stay competitive – especially in an environment where fuel margins are razor-thin.
Want help reviewing your processing fees or upgrading your POS system for better rates? Reach out to a payment advisor who specializes in the petroleum industry.
