top of page
  • LinkedIn
  • Twitter
  • ModPay Solutions

The Difference Between Zero Processing Fees and Traditional Processing

Choosing the right payment processing solution for your business is a crucial decision. If you're considering traditional processing versus zero processing fees, it is important to understand their differences to make an informed decision.

Depending on your business type, standard processing options may not be the most cost-effective option, which is why zero processing solutions are becoming increasingly popular.

In this blog from ModPay Solutions, we'll compare and discuss the differences between traditional processing and zero processing fees. We'll also cover considerations for each so that you can choose the best option for your business.

The Difference Between Zero Processing Fees and Traditional Processing

Table of Contents:

  1. Traditional Payment Processing

  2. Zero Fee Processing Explained

  3. Traditional Processing Vs. Zero Processing Fees: Understanding the Difference

  4. Traditional processing fees

  5. Zero Processing Fees

  6. What to Consider When Choosing between Traditional and Zero Processing Fees

  7. Conclusion

People Also Ask:

What is zero fee processing?

No cost processing, or zero fee processing, is a payment processing solution where credit card processing fees are passed to your customers instead of your business to cover the transaction costs.

What does processing fee mean?

Processing fees are the costs that businesses (merchants) pay every time they accept a credit or debit card payment. It’s important to understand that payment processors have different pricing as their offerings and products may vary.

Traditional Payment Processing

Traditional payment processing systems have been used by businesses for decades now. These systems typically charge up-front and monthly fees, often referred to as merchant fees.

With traditional payment processing, merchant providers may also charge transaction fees based on the number of transactions you process through their service. This system is generally best suited for companies with a low risk of chargebacks and fraud.

Zero Fee Processing Explained

Zero processing fee accounts are just as they sound—credit card payment processing with no fees attached. A zero processing fee system offers businesses an alternative to traditional processing fees.

Zero fee processing does not charge upfront or monthly fees and instead charges the customer when they complete their purchase. This can benefit high-risk businesses, such as online retailers, who need more control over their risks and fraud management processes.

Additionally, zero fee systems are more user friendly than traditional processing options due to their simplified checkout process and lack of monthly fees. Because these accounts charge no additional costs on credit card transactions, all the money goes directly to the business with no bank or merchant commissions taken out.

Traditional Processing Vs. Zero Processing Fees: Understanding the Difference

Choosing the right payment processing system for your business is a crucial decision. Let’s look at the differences between traditional processing and zero processing fees and what each payment processing method entails.

Traditional processing fees

Traditional processing fees refer to the standard transaction fees businesses must pay to process transactions via credit or debit card. The average rate for conventional processing fees is about 1.5 - 3.5% per transaction. However, this percentage can vary depending on the business type and payment processor used.

In addition to these fees, businesses must also pay costs associated with fraud protection services, account setup and maintenance fees, and any other expenses that the payment processor may require.

The downside with standard processing fees is that the costs can quickly add up over time if your business has high sales volumes or processes large amounts of payments regularly. Some payment processors may charge higher rates than others, making it essential to shop around before committing to one merchant provider.

Zero Processing Fees

These options are becoming increasingly popular among businesses that want to offer their customers more affordable ways to pay without incurring hefty transaction costs.

The main benefit of zero cost processing options is that businesses don’t have to worry about paying any additional costs associated with accepting customer card payments. This makes them ideal for companies who want to keep their overhead costs down while still offering their customers convenient payment options.

Additionally, zero processing options typically come with built-in fraud protection services, which help protect both businesses and customers against unauthorized card use and transactions on their accounts.

What to Consider When Choosing between Traditional and Zero Processing Fees

There are several factors to consider when choosing between traditional and no processing fee accounts. The first is the cost savings associated with such an account, depending on your business type and how many transactions you process each month.

Opting for a zero fee account could save you hundreds, if not thousands, of dollars annually. Many businesses find that zero fee processing accounts help simplify their payment processes since all funds go straight into their bank account without deductions for commissions or other fees.

Finally, it may be worth considering whether your customers will appreciate being charged less in fees when making payments. Depending on the type of product or service you offer, this could mean increased customer satisfaction and lead to more repeat business in the long run.


Choosing a zero processing fee option over traditional processing can provide numerous advantages for businesses that may not be able to manage the costs of processing fees yet still need access to digital payment solutions.

Ultimately, making sure you choose the right processor is key in helping you make informed decisions regarding your business’s payment processing.

Would you like to know more about zero cost processing?

31 views0 comments


bottom of page