Payment Processing Fees Explained: What Your Club Actually Pays

A member pays $75 in annual dues. You check the bank account the next day. The deposit is $72.13. Where did the other $2.87 go?

If you’re a volunteer treasurer, this post is for you. Processing fees show up as line items on your statement, shrink every deposit by a few percent, and quietly add up to hundreds of dollars a year.

The problem isn’t that fees exist. Moving money costs money. The problem is that nobody explains what you’re paying for, who gets each slice, and whether you’re overpaying. So let’s fix that.

The Three Layers of Every Credit Card Transaction

Every time a member swipes, taps, or types in a credit card number, three separate organizations take a cut. Not one. Three.

Layer 1: Interchange fees (goes to the card-issuing bank). This is the biggest piece. When a member pays with their Chase Visa, Chase collects an interchange fee for issuing that card. These fees are set by the card networks (Visa, Mastercard, etc.) and vary based on card type, transaction method, and merchant category. A standard consumer credit card might carry an interchange rate of 1.5% to 2.1% plus a small fixed fee. A premium rewards card charges more, sometimes 2.3% to 2.5%, because someone has to fund those airline miles. According to industry analyses, interchange accounts for 75% to 85% of total processing costs for most merchants.

Layer 2: Assessment fees (goes to the card network). Visa, Mastercard, American Express, and Discover each charge a small percentage for using their network. Think of it as the toll for riding on their highway. Assessment fees are typically 0.13% to 0.15% for Visa and Mastercard. American Express runs higher. On a $75 transaction, this layer adds roughly $0.10 to $0.15.

Layer 3: Processor markup (goes to your payment processor). Stripe, Square, PayPal, or whoever processes the payment takes their own cut on top of the first two layers. This is the only layer you can actually shop around for. The markup covers the processor’s technology, fraud prevention, customer support, and profit margin.

Here’s what makes this confusing: most processors don’t show you the three-layer breakdown. They quote a single flat rate (like 2.9% + $0.30) that bundles everything together. You never see how much goes to Chase, how much goes to Visa, and how much goes to Stripe.

That bundled model is called “flat-rate” pricing. It’s simpler to understand, and for most small organizations it’s fine. But it’s worth knowing what’s inside the bundle so you can tell whether you’re getting a fair deal.

What Stripe, Square, and PayPal Actually Charge

Let’s break down the three processors most volunteer-run clubs encounter. These rates are current as of early 2026.

Stripe

Stripe is the processor behind many membership management tools, including most of the ones we reviewed and tested head-to-head. Here’s what they charge:

• Online card payments: 2.9% + $0.30 per transaction
• ACH direct debit: 0.8% per transaction, capped at $5.00
• International cards: 4.4% + $0.30 (adds 1.5% for cross-border processing)
• Manually keyed cards: 3.4% + $0.30

There’s no monthly fee, no setup cost, and no minimum. You pay per transaction only. Stripe charges a $15 fee for every dispute (chargeback), plus an additional $15 counter fee if you contest it, introduced in June 2025. You get the counter fee back if you win, but the base $15 is non-refundable either way.

For a $75 dues payment by credit card, Stripe takes $2.48 (that’s $75 x 0.029 + $0.30). Your club deposits $72.52.

Square

Square overhauled its pricing in late 2025, creating three unified tiers. For online payments (which is how most clubs collect dues), here’s what you’ll pay as of January 2026:

• Free plan: 3.3% + $0.30 per online transaction
• Plus plan ($49/month): 2.9% + $0.30 per online transaction
• Premium plan ($149/month): 2.9% + $0.30 per online transaction

That free-plan rate is meaningful. At 3.3% + $0.30, a $75 dues payment costs $2.78 in fees. That’s $0.30 more per transaction than Stripe. Across 150 members, the difference is $45 per year. Not life-changing, but not nothing for a club watching every dollar.

Unless your organization processes enough volume to justify the $49/month Plus plan, Square’s free tier is more expensive per transaction than Stripe for online dues collection.

PayPal

PayPal’s fee structure is the most confusing of the three. The rate depends on how the payment comes in:

• Standard card payments: 2.99% + $0.49 per transaction
• PayPal Checkout (express checkout): 3.49% + $0.49 per transaction
• Charity rate (registered 501(c)(3) only): 1.99% + $0.49
• International transactions: Add 1.5% on top of the domestic rate

That checkout rate catches people off guard. If members pay through a PayPal button using express checkout, you’re paying 3.49% + $0.49, not 2.99% + $0.49. On a $75 payment, that’s $3.11 in fees instead of $2.73.

The charity rate at 1.99% is excellent, but it’s only available to organizations with verified 501(c)(3) status. Most informal clubs, PTOs, and cultural associations don’t qualify. If your group does have 501(c)(3) status, it’s worth applying. On a $75 payment, you’d pay just $1.98. Our guide to setting dues at fair and sustainable levels covers how to factor processing costs into your pricing.

ACH and Bank Transfers: The Cheaper Alternative

ACH (Automated Clearing House) payments pull money directly from a member’s bank account, skipping the credit card networks entirely. That means no interchange fees and no assessment fees. Just the processor’s cut.

Stripe charges 0.8% for ACH, capped at $5. On a $75 dues payment, that’s $0.60 in fees. Compare that to $2.48 for a credit card payment through the same processor. The savings are significant.

So why doesn’t everyone just use ACH? A few reasons.

Members have to enter their bank account and routing numbers, which feels more invasive than typing a card number. ACH payments take 3-5 business days to settle instead of arriving within 1-2 days. And ACH has a higher rate of returns (the equivalent of bounced checks) because there’s no real-time balance verification.

For organizations that want to offer ACH as an option alongside credit cards, it’s a solid way to reduce fees. Some clubs even incentivize ACH by noting the fee difference to members. If you’re exploring the full range of payment methods, our comparison of online vs. offline collection lays out the tradeoffs for every approach.

How Membership Software Adds Fees on Top

Here’s where it gets sneaky. When you use a membership management tool that handles payments, you’re often paying two layers of fees: the payment processor’s cut, plus the software’s own markup or surcharge.

Some tools bundle processing into their subscription price. Others tack on a per-transaction fee. A few charge both.

Wild Apricot, for example, has a Payment System Servicing Fee (PSSF) that adds 20% to your subscription price if you use any processor other than their in-house option (AffiniPay). On a $63/month plan, that bumps you to roughly $75.60/month. That’s $151/year extra just for choosing your own processor. And you still pay the processor’s transaction fees on top.

Other tools charge a flat percentage on top of Stripe’s rate (1% to 2% extra per transaction is common). Others include processing in the subscription with no additional markup. The variation is wide, which is why we published a detailed pricing comparison of membership software that breaks down what each tool charges.

The point: when evaluating what your club pays, you can’t just look at the processor’s rate. You have to look at total cost, including software markup. A tool that advertises “free” but adds 2% per transaction is more expensive than one that charges $10/month with no transaction markup, once you’re processing more than a few hundred dollars per month.

When you’re shopping for the right tool, our membership software feature checklist includes a section on payment processing transparency that helps you spot hidden costs.

The Concrete Example: 150 Members Paying $75

Let’s put real numbers to this. Your club collects $75 in annual dues from 150 members. That’s $11,250 in total dues revenue. Here’s what each payment method actually costs your organization.

Credit Card via Stripe (2.9% + $0.30)

• Fee per transaction: $75 x 0.029 + $0.30 = $2.48
• Total fees for 150 members: $371.25
• Net revenue: $10,878.75
• Effective rate: 3.30%

Notice the effective rate is higher than 2.9%. That’s because of the fixed $0.30 per transaction. On small transactions, the fixed component has an outsized impact. If your dues were $200 instead of $75, the effective rate would drop to 3.05%. The smaller the payment, the bigger the bite from that $0.30.

Credit Card via Square Free Plan (3.3% + $0.30)

• Fee per transaction: $75 x 0.033 + $0.30 = $2.78
• Total fees for 150 members: $416.25
• Net revenue: $10,833.75
• Effective rate: 3.70%

That’s $45 more than Stripe per year. Small in isolation, but it’s money that could cover a meeting room rental or fund part of an event.

PayPal Checkout (3.49% + $0.49)

• Fee per transaction: $75 x 0.0349 + $0.49 = $3.11
• Total fees for 150 members: $466.13
• Net revenue: $10,783.88
• Effective rate: 4.14%

PayPal’s express checkout rate hits noticeably harder. Your club loses nearly $100 more per year compared to Stripe, simply based on the processor choice.

ACH via Stripe (0.8%, capped at $5)

• Fee per transaction: $75 x 0.008 = $0.60
• Total fees for 150 members: $90.00
• Net revenue: $11,160.00
• Effective rate: 0.80%

ACH saves your club $281 compared to Stripe credit card processing and $376 compared to PayPal Checkout. That’s real money for a volunteer organization.

Cash or Check ($0 processing fees)

• Processing fees: $0.00
• But: 10-15 hours of volunteer labor for tracking, depositing, reconciling, and chasing late payments
• Risk of bounced checks, lost cash, commingled funds
• No automatic receipts, no payment records, no audit trail

Zero processing fees sounds great until you account for the real cost of managing everything through spreadsheets. And if members are paying through Venmo or Zelle to avoid fees, you’re trading one problem for another: here’s why that’s risky. The treasurer’s time has value, even when nobody’s writing them a check for it.

Side-by-Side Summary

*Does not account for volunteer labor, bank trips, bounced checks, or reconciliation time.

Why Small Transactions Get Hit Harder

Did you notice how the effective rate on a $75 credit card payment through Stripe is 3.30%, not 2.9%? That’s the fixed-fee effect, and it’s especially important for clubs collecting modest dues amounts.

The $0.30 fixed fee represents 0.4% of a $75 transaction. On a $25 transaction, that same $0.30 becomes 1.2% of the total, pushing the effective rate above 4%. On a $200 transaction, it drops to 0.15%, making the effective rate much closer to the advertised 2.9%.

This has a practical implication for how you structure dues. Collecting $75 once a year is cheaper per dollar than collecting $6.25 per month, because you pay the $0.30 fixed fee once instead of twelve times. Twelve monthly payments of $6.25 through Stripe cost $3.60 in fixed fees alone ($0.30 x 12), compared to $0.30 for a single annual payment.

Annual billing saves your club money on processing fees. Monthly billing gives members flexibility and can improve payment rates. There’s no universally right answer, but you should know the math before deciding. If you’re weighing these options, our definitive guide to collecting membership dues walks through the timing question in detail, and our annual planning guide shows how to align billing cycles with your organization’s calendar.

Can You Pass Fees to Members?

Some organizations add a “convenience fee” or “processing fee” surcharge so the club receives the full dues amount and the member covers the transaction cost.

Is this allowed? It depends.

Most processors allow surcharging under certain conditions. Visa and Mastercard permit surcharges up to 3% in most U.S. states, but several states and territories (including California, Connecticut, Maine, Massachusetts, and Puerto Rico) ban or restrict credit card surcharges.

The practical question is whether it’s worth the awkwardness. Adding $2.48 to a $75 payment can feel nickel-and-dime-ish to members who are already paying to belong. Some clubs handle this by rounding dues to absorb fees (setting dues at $77 instead of $75) and never mentioning the surcharge. Others offer a discount for ACH: “Pay $75 by bank transfer or $78 by credit card.” Either works. Just be consistent and upfront.

How to Calculate Your True Cost Per Transaction

Here’s a simple formula you can use to figure out what your club actually pays per transaction, regardless of processor:

True cost = (transaction amount x percentage rate) + fixed fee + any software markup

If your membership software adds a 1% surcharge on top of Stripe:

• $75 x 0.029 (Stripe) + $0.30 + $75 x 0.01 (software markup) = $2.48 + $0.75 = $3.23
• Effective rate: 4.31%

That software markup turns a competitive 2.9% rate into something much less attractive. This is why comparing tools matters. We broke it down tool by tool in our free membership management tools review.

If your current setup is costing more than you realized, our post on choosing the right membership management software walks through the full decision, including payment costs.

Five Things Every Volunteer Treasurer Should Do

You don’t need to become a payments expert. You just need to know enough to avoid overpaying and to explain the numbers to your board. Here’s the short version.

1. Know your effective rate, not just the advertised rate. Take your total processing fees from last year and divide by total dues collected. That’s your real cost. If it’s above 4%, you’re likely overpaying somewhere. A tool that tracks dues without spreadsheets makes this calculation trivial.

2. Offer ACH as a payment option. Even if only 30% of members use it, the savings add up. On our 150-member example, if 50 members pay via ACH and 100 pay by card, your total fees drop from $371 (all card) to $278 (mixed). That’s $93 saved for doing nothing more than offering a second option.

3. Bill annually when possible. Every transaction carries a fixed fee. Fewer transactions means fewer fixed fees. Annual billing on a $75 payment costs $0.30 in fixed fees. Monthly billing costs $3.60.

4. Read the fine print on your membership software. Does it add a per-transaction fee? Does it penalize you for using a different payment processor? Does it take a percentage on top of the processor’s rate? These questions often matter more than the subscription price.

5. Don’t chase lower fees at the expense of getting paid. The cheapest payment method is the one members actually use. If switching to ACH-only causes 40 members to never pay because they find it confusing, you haven’t saved money. You’ve lost members. Offer choices. Let members pick what works for them. If you want to get the communication right, our guide to handling members who don’t pay dues covers the follow-up process from reminder to final notice.

The Bottom Line

Processing fees are a cost of doing business, even when your “business” is a volunteer-run club collecting $75 a year. But they don’t have to be a mystery, and they don’t have to be higher than necessary.

The typical club paying by credit card loses 3% to 4% after fixed fees. Offering ACH drops that below 1%. Choosing the right processor and membership software can save hundreds of dollars a year without extra effort from your treasurer.

The worst thing you can do is ignore fees entirely through a tool you picked three years ago and never revisited. The second worst is chasing the lowest rate at the cost of making it harder for members to pay, because unpaid dues cost more than processing fees ever will.

Know the math. Pick tools that are transparent about costs. Make it easy for members to pay. That’s the whole strategy.

Somiti gives your club transparent payment processing with no hidden markups, plus automatic tracking so your treasurer isn’t stuck reconciling spreadsheets. See how it works at https://www.somiti.app.