As Thailand steadily approaches a cashless society, credit cards have become one of the most popular payment methods in the country, used both in physical stores and online. As a business owner, accepting credit card payments is a great option that not only addresses the issue of accessibility and convenience for your customers, but also expands your market, potentially increasing sales. However, it is important to be aware of the various card processing fees that can significantly impact your business’s bottom line.

In this article, we’ll go over what credit card processing is, how to accept credit card payments, and what credit card fees to look out for. We’ll also outline ways to reduce these fees and manage your operational costs more efficiently.

Main content of the article

• What is credit card processing?
  
• Credit card processing fees
  
• What are the fees for accepting credit card payments?
  
• Guidelines for reducing credit card fees for businesses
  
• How Stripe Payments can help
  

What is credit card processing?

Credit card processing occurs whenever a customer makes a purchase with a card. It involves the transaction being authorized and verified, and the funds being transferred from the cardholder’s account to the business. This process usually involves multiple parties: the cardholder, the business, the issuing bank, the acquiring bank, the security system, and the credit card network. The primary networks in Thailand are Visa, Mastercard, American Express, JCB, and UnionPay.

The process begins when a cardholder uses their credit card to pay either in-person—often by swiping the card through an Electronic Data Capture (EDC) machine—or online by entering card information. The machine or online platform then transmits the transaction information to the bank, which forwards the request to the credit card network, which forwards it to the issuing bank. The bank checks the credit limit and approves or rejects the transaction. The response is sent to the business. If it was approved, the amount is charged to the cardholder’s account—thereby lowering their credit limit—and the funds are transferred to the business. Once payment is confirmed, the business provides the service or delivers the goods, completing the transaction.

Credit card processing in Thailand is under the supervision of the Bank of Thailand (BOT) and complies with international standards for data security, such as Payment Card Industry Data Security Standard (PCI DSS) standards and various fraud prevention systems designed to make card payments fast, secure, and efficient.

Credit card processing fees

There are three main fees that businesses pay when accepting credit cards as a payment option:

• Credit card processing fees, or simply “processing fees”: A fee is charged by a payment processor or business service provider for its role in facilitating transactions. This can be a flat fee per transaction, a percentage of the transaction value, or a combination of both.
  
  • Visa: Fees range from 1.15% + $0.05 to 2.4% + $0.10 per transaction.
    
  • Mastercard: Fees range from 1.15% + $0.05 to 2.5% + $0.10 per transaction.
    
  • American Express: Fees range from approximately 1.43% + $0.10 to 3.30% + $0.10 per transaction.
    
  • Interbank card transaction fees, also called “interchange fees”: These are fees charged by the card issuer to the business’s bank. Usually interchange fees are a percentage of the transaction value plus a flat fee, which varies depending on factors such as the card type (i.e., credit or debit card), transaction method (e.g., swipe, insert, manual entry of card information), and the business’s industry.
    
• Assessment fees or card network fees: These are fees that a business’s bank must pay to the card network—such as Visa or Mastercard—to cover the costs of operating and maintaining the card network infrastructure. They are typically a small percentage of the transaction value.
  

What are the fees for accepting credit card payments?

These are some common kinds of fees you might encounter when accepting and processing credit card payments:

• Transaction fees: This kind of fee is charged for every credit or debit card transaction, and it is typically between 1.5% and 3.5% per transaction, depending on the card issuer (e.g., Visa, Mastercard, Amex) and the business’s risk level. Businesses with high monthly sales volumes might be able to negotiate a more favorable rate. Transaction fees are usually deducted from the amount that is deposited into the business’s account.
  
• Monthly fees: Some providers charge a monthly—or annual—fee for use of the payment system, which covers customer support, back-end administration, sales analytics tools, and account maintenance, even if no transactions occur. The normal rate is 200–1,000 baht per month, or more if there are additional services.
  
• Terminal or equipment fees: Businesses might need to purchase or lease payment processing equipment such as EDCs or point-of-sale (POS) systems, which typically costs 300–800 baht per month. These can come with additional fees—such as setup fees or charges for using nonstandard equipment or accepting multiple payment methods (e.g., QR code payments or near-field communication [NFC])—which will increase the overall cost. Some providers offer free usage promotions for signing long-term contracts.
  
• Payment gateway fees: This fee is charged by the payment gateway provider for facilitating and securing the transmission of payment information. It can be a flat fee per transaction or a percentage of the transaction value—usually around 2%–3.5%. Some providers might also charge an initial set-up fee, annual fee, international card fee, or charges for additional services such as in-depth marketing reports or fraud prevention systems.
  
• Chargeback fees: This is a payment processing fee charged to businesses when a credit card refund is requested for reasons such as the cardholder complaining that the product was not received or the card was used without their authorization. When a chargeback occurs, the business doesn’t receive the funds from the transaction and might be required to pay additional fees to the bank or cardholder. Cashback fees in Thailand range from 100–750 baht per transaction.
  
• Currency conversion fee: As the name suggests, this is a fee related to currency conversion, such as when using a Thai credit card abroad or purchasing goods from foreign online businesses. This fee is typically around 1% of the transaction value, or 10 baht per every 1,000 baht.
  
• Miscellaneous fees: Other expenses that can occur, include early termination fees, cash withdrawal fees, account verification fees, or payee change fees. These fees might be small but can add up to significant costs and should be carefully monitored and managed.
  

To obtain accurate and precise credit card processing fee information, it is important to carefully study each card network’s fees and the specific terms and conditions of each payment provider.

Guidelines for reducing credit card fees for businesses

To reduce your credit card processing fees, you can take the following actions.

Explore options and negotiate

As your business grows, your processing needs might change. It’s worth comparing different payment processors and their fee structures to find the best option for your business. If you have a high transaction volume or a good history with consistently low refund rates, consider making an annual appointment to negotiate with your provider, and ask them to waive their minimum for new business or slow seasons.

Choose the appropriate service fee model

Choose a provider with a fee structure that suits your business; analyze different pricing models, and the elements they include—for instance, flat rate fees, tiered pricing, or interchange fees. Models that involve interbank card transaction fees are often more transparent and cost-effective than tiered pricing, making them suitable for businesses with high transaction volumes. Flat rates tend to be more suitable for businesses with low transaction volumes.

Reduce the risk of fraud

Using security measures such as address verification service (AVS) and card verification values (CVVs) can reduce the risk of fraudulent transactions and chargebacks. The lowered risk can lead to lower processing fees, as processors tend to charge less for transactions that are assessed as low risk. Using AVS also helps reduce chargebacks.

Encourage customers to use other payment methods

Consider alternative payment methods that have lower fees than credit cards, such as debit cards, digital wallets, or QR code payments. You can encourage customers to use these methods by displaying promotional signs at the POS, or by communicating on your website or social media. This strategy can reduce processing fees and speed up the transaction process.

Set a minimum transaction amount

Setting a minimum purchase amount for credit card transactions can help reduce your processing fees, as low-value sales are subject to certain credit card network guidelines and local laws. For example, at 7-Eleven stores in Thailand, the minimum purchase amount for credit card payments is 200 baht, but some stores might set a minimum of 500 or even 1,000 baht. It is important to clearly communicate the minimum transaction amount policy to customers to avoid confusion or dissatisfaction.

Set up your payment gateway correctly

It’s important to properly configure your payment gateway. Incorrect processing might result in misclassification of transactions, with processing fees being adjusted to higher rates—meaning more expensive for your business. Payment gateway settings should also be checked regularly to ensure that the system automatically captures all necessary transaction data, thereby ensuring your transaction volume is accurately reflected and you are eligible for the lowest possible payment rate.

Update your devices and software regularly

Outdated equipment or software can pose a security risk and increase the possibility that transactions will be processed at higher rates. As a business owner, you need to invest in modern technology to mitigate these risks, and, whenever possible, improve transaction speed and security.

Use industry-specific programs

Some card networks offer programs tailored to specific organizations, such as nonprofits and certain educational organizations, that charge reduced processing rates. To lower your costs, check to see if your business qualifies for these industry-specific programs.

Check fees regularly

Check your payment processing fees and statements periodically to ensure you are not being charged unnecessary fees or rates higher than originally agreed upon. Keep an eye out for any changes to your fee structure or additional fees your processor might have implemented without your knowledge.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.