What Card Processing Really Costs Contractors (and When to Push ACH)

A $9,000 kitchen remodel invoice. Customer taps “Pay with card.” You get $8,738.70.

That $261.30 didn’t show up on any line item. It didn’t go in your job cost sheet. It came straight out of net profit — and if you were running a 12% margin on that job, you just gave away about a quarter of a point of margin for the convenience of getting paid 48 hours faster.

Do that on $400,000 of annual revenue and you’re paying somewhere north of $8,000 a year for the privilege of taking money. That’s a decent used truck every three years.

Here’s what the fees actually are, where they hide, and the two legitimate ways to stop eating them.

What you’re actually paying for

Every card payment has three layers:

1. Interchange — goes to the bank that issued your customer’s card. Roughly 1.3% to 2.5% depending on card type. A basic debit card is cheap. A premium travel-rewards Visa Infinite is expensive. You don’t control this.
2. Network fees — Visa/Mastercard’s cut. Small, around 0.13%.
3. Processor markup — Stripe, Square, Intuit, Jobber’s payment partner. This is the only part that’s negotiable, and on flat-rate pricing it’s bundled invisibly.

Flat-rate processors (Stripe, Square, most field-service apps) charge you the same whether your customer pays with a no-frills debit card or a black Amex. On low-cost cards you’re overpaying; on premium cards the processor is eating the difference. That’s the deal. For most contractors under $500k it’s a fine deal because the alternative — interchange-plus pricing with a merchant services rep — comes with monthly minimums, PCI compliance fees, statement fees, and a three-year contract with early termination language.

The $9,000 invoice, four ways

Published rates move, and some apps quote different numbers for in-person taps versus emailed invoices versus stored cards. Check the current rate card before you act on this. But here’s the shape of it:

Payment method	Typical published rate	Cost on $9,000	You receive
Card tapped/dipped in person	~2.6% + $0.10	$234.10	$8,765.90
Card paid via emailed invoice	~2.9% + $0.30	$261.30	$8,738.70
Card keyed in by you / card on file	~3.3–3.5% + $0.15	$297–$315	~$8,685–$8,703
ACH bank transfer	~1% capped at $5–$10	$10	$8,990

The in-person rate is lower because the card being physically present cuts fraud risk. The most expensive thing you can do is read a customer’s card number off the phone and type it in. That’s the “keyed” rate, and it’s the one a lot of contractors default to because it feels fastest.

The ACH line is the one worth staring at. Same $9,000, same money in your account, $251 difference.

The annual number nobody calculates

Run it for a real year. Say you do $400,000, and 70% of that comes in on cards:

Line	Amount
Card volume	$280,000
At ~2.9% effective	$8,120
Plus ~180 transactions × $0.30	$54
Annual card cost	~$8,174
Effective cost on total revenue	2.04%

Now shift half your card volume to ACH:

Line	Amount
Card volume $140,000 at 2.9%	$4,060
ACH volume $140,000, ~25 payments capped at $10	$250
New annual cost	~$4,310
Saved	~$3,864

You didn’t sell one extra job. You changed a default on your invoice template.

Where ACH wins and where it doesn’t

ACH is a bank-to-bank transfer — the same rails as direct deposit. The customer enters routing and account numbers, or logs into their bank through a connected flow. The fee is usually a flat 1% with a hard cap, which is why it crushes cards on anything over about $1,000.

ACH is almost always the right call on invoices above $2,500. Below that, the difference is small enough that friction matters more than fee.

Factor	Card	ACH
Fee on $500	~$14.80	~$5
Fee on $9,000	~$261	~$10
Funding time	1–2 business days	2–5 business days
Customer friction	Very low	Moderate — needs bank login or account numbers
Failed payment	Declines instantly	Can bounce days later for NSF
Dispute window	Long — card networks give consumers months	Shorter, but unauthorized consumer debits can be returned

Two real downsides. First, an ACH payment can fail days after it looks successful. Insufficient funds, closed account, wrong routing number. If you’ve already released the job or ordered the next material package, you’re exposed. Second, slower funding hurts if you’re thin on cash — though if you are, the fix is better deposits and progress payments, not a faster payment rail.

One upside nobody mentions: ACH is harder for a customer to casually reverse than a card chargeback. Card disputes are a phone call. If you do large-ticket work for homeowners, that’s worth real money.

Surcharging: legal, but read the rules

Surcharging means adding a fee when the customer pays by credit card. It’s legal in most of the country now, but it’s governed by three separate rulebooks and you have to satisfy all of them.

Card network rules. Visa and Mastercard both require that you notify the card networks and your processor before you start — typically 30 days’ advance notice. There’s a cap on the surcharge percentage, and the networks have lowered it in recent years, so confirm the current ceiling with your processor rather than assuming 4%. You must disclose the surcharge before the customer commits, and it must appear as a separate line on the receipt. You cannot surcharge more than your actual cost of acceptance.

Debit cards cannot be surcharged. Period. That’s federal, not a network preference. And you often can’t tell from the card number alone whether something is debit or credit — which is why, if you surcharge, you should use a processor tool that detects card type automatically and suppresses the fee. Doing it manually on a paper invoice is how you end up on the wrong side of a rule.

State law. A small number of states have restricted or banned surcharging, and several of those bans have been challenged in court with mixed results. The map has changed repeatedly. Do not take a blog’s word for your state — ask your processor’s compliance team, because they track this and they’ll disable the feature if you’re not allowed to use it.

A “convenience fee” is a different thing and a narrower one: it generally applies only when you offer an alternative payment channel that isn’t your standard one. If card-on-the-invoice is how you normally get paid, calling it a convenience fee doesn’t work.

The cash discount alternative

Instead of adding 3% for cards, you publish the card price and offer a discount for check or ACH. Mathematically identical. Legally simpler in most places, because you’re discounting rather than surcharging. Network rules have always permitted discounts for cash or check.

The catch is you have to actually raise your posted prices first. If your deck repair was $3,950 and you now quote $3,950 “or $3,830 if you pay by check,” you just gave away 3%. The correct version is to quote $4,070 with a $120 check discount.

That’s the same move as the third option below, with better optics.

Or just build it into the price

Honestly, this is what most one-to-five-person shops should do.

If cards cost you about 2% of total revenue, raise prices 2%. On a $7,500 bathroom that’s $150. Nobody has ever lost a bathroom remodel over $150, but plenty of contractors have soured a closing conversation over a $225 surcharge line that appeared at the end.

The arithmetic matters here. To recover a 2% cost you don’t multiply by 1.02 — you divide by 0.98, same as the margin math in how to price contracting jobs. On $7,500 that’s $7,653, so round to $7,700. If you’re already on a flat-rate price book, bump the whole book once and forget about it.

Surcharging makes the most sense when your tickets are large, your competitors do it, and your customers are commercial rather than residential. A property manager paying from a company card expects a surcharge. A homeowner signing a $38,000 contract reads it as nickel-and-diming at the exact moment you want them relaxed.

How to actually move customers to ACH

The fee savings only happen if the customer picks the cheaper button. Four things that work:

1. Make ACH the default and the first option shown. Most invoicing tools let you reorder or toggle methods per invoice. Card below, not above.
2. Turn cards off entirely above a threshold. Set it at $5,000 or $10,000. On a $20,000 progress payment, a 2.9% hit is $580 — just don’t offer it.
3. Say it out loud at contract signing. “Invoices go out by email. There’s a bank transfer option that’s free for both of us — card works too, but bank transfer is what most people use.” Framing it as normal does most of the work.
4. Keep accepting checks without complaining. A check costs you a trip to the bank and zero percent. For a $9,000 payment, the deposit app on your phone is worth $261.

If your current tool doesn’t support ACH at a capped rate, that’s a legitimate reason to switch — see the breakdown in the best contractor invoicing app. And if you’re still chasing payments by text two weeks after completion, the fee is the smaller problem; fix the invoicing and collections process first.

Your next move

Pull your last 12 months of processing statements and find the total fees line. Divide it by total revenue. That’s your real effective rate — and it’s almost always higher than the headline percentage because of keyed transactions and per-item charges.

Then go into your invoicing software today and do one thing: turn on ACH, make it the top option, and set a dollar threshold above which cards are off. That single change is worth more than any negotiation you’ll have with a merchant services rep.