Effective rate
Total fees for a period divided by total gross takings for the same period, with every non-percentage line item folded in — rentals, minimums, administration charges. It is the only figure that is comparable between two providers, because a headline percentage says nothing about what else is being charged or about the mix it is applied to.
Why it matters to a merchant
The only cost figure worth acting on, and any merchant already taking payments can calculate it from one month of their own statements. Doing so once turns a comparison of quoted rates into a comparison of outcomes, and it regularly reorders the shortlist.
Read more: How payment processing fees are actually built
Where this comes up
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Related terms
In this section: What it costs, and what gets measured