What it is
Your effective rate is everything you paid in processing fees during a month divided by your total card volume. It cuts through pricing models and fee names.
What it costs you
Effective rates vary widely by business type, card mix and pricing model. A rate well above your peers often signals hidden markup.
What to do about it
- Calculate it from a full month's statement
- Track it month over month
- Compare quotes on effective rate, not headline rate