If you accept credit cards in your business, you’ve probably looked at those processing fees and wondered: Should I just pass this cost on to my clients?
It’s tempting. The fees add up. And you can technically charge clients for them.
But should you?
I actually had to answer this question for myself about a year and a half ago when I switched to new billing software. For the first time, I had the option to have customers cover the credit card fee. So I had to decide: Do I turn that on, or do I just absorb the cost?
Here’s how I thought it through.
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Why Am I Trying to Avoid Paying for a Service I'm Using?
That was the first question that came to mind when I was deciding.
I pay for my email subscription. I pay for my appointment scheduler. I pay for all sorts of business tools without thinking twice. But credit card processing fees? Those felt different.
I think it's because they don't feel fair. Why is this a percentage? The actual effort of transferring $10 versus $10,000 is probably the same, right? So why does the fee go up the more money you receive?
I get why it feels frustrating. But here’s the thing: it’s still a service.
If I wanted to accept credit cards without using a payment processor, I’d have to figure out a whole complicated system on my own. The processor is doing something I don’t want to do, and it makes it easier for my clients to pay me however they want.
That convenience is worth something. And that realization helped me lean toward just absorbing the fee.
What's the Customer Experience?
The second thing I did was put myself in the customer’s shoes.
As business owners, we’re so focused on our own operations that sometimes we forget what it’s like to be on the receiving end. But we’re customers all the time for other businesses.
So I thought: What does it feel like when I’m charged extra for using a credit card?
I remembered a time I took my car to a body shop. When I went to pay, there was a handwritten sign that said if I used a credit card, I’d be charged 3% more.
It didn’t feel good.
From a customer perspective, there’s no value add to that extra fee. It feels like I’m being penalized for paying you. And honestly? I’d rather you just roll it into your pricing.
Now, from the business side, you might think: “That’s silly. They’re still paying more either way.”
But from the customer side, it’s different. When the cost is built into the total price, it feels like I’m paying for the service. When it’s listed separately as an extra fee, it feels like nickel-and-diming.
That’s what sealed the decision for me.
My Decision: Eat the Fee
I decided not to pass credit card fees on to my clients. Instead, I treat it as a business expense and price my services accordingly.
Whenever I set a price for a service, I factor in the processing fee to make sure I’m still making what I need after the fee is deducted.
My Decision: Eat the Fee
Now, I’m not saying you should always just eat the fee without thinking about it. There are cases where the fees can get really high, and it makes sense to find ways to reduce them.
For example:
- If you’re accepting large payments (high dollar amounts), you might want to offer alternatives like ACH or wire transfers that have lower fees
- If you have high volume sales, some merchant services companies can help negotiate lower per-transaction rates
The question isn’t whether fees matter. They do. The question is: Should you pass that cost directly to your customer?
For me, the answer is no. But it’s a decision you have to make based on your business, your values, and what matters to you.
The Bottom Line
Should you pass credit card processing fees to clients? I say no. Treat it as a business expense, build it into your pricing, and keep the customer experience simple.
But ultimately, it’s your call. I just wanted to share how I thought through it, and hopefully that helps you make your own decision.
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