For two decades, the petroleum industry has operated on a simple “handshake” at the pump. The customer swipes their card, the machine verifies the chip, and the transaction is complete. This is Card Present (CP) processing—a world c-store owners and fuel marketers know well.
However, the “Amazon Effect” has officially arrived at the gas station. Customers now expect to pay via mobile apps, pre-order food from the convenience store online, or manage bulk fuel deliveries through digital portals. While this transition offers massive growth potential, many owners hesitate because of one major concern: Card Not Present (CNP) fees.
But do you really have to expect a fee increase from 2% (card present average) to 4% (CNP averages)? Not necessarily. Let’s demystify the cost of going digital and provide a roadmap for a profitable transition.
Why CNP Costs More
In a physical store, the card’s security chip proves the card is real. In the digital world, that physical proof is gone. Because banks cannot “see” the card or the customer, they view online transactions as higher risk for fraud. To cover this risk, the card networks (Visa and Mastercard) charge a “security premium.” This is why a transaction that costs 1.50% at the pump might cost 2.30% inside a mobile app. It isn’t a penalty for being digital; it’s essentially an insurance premium against fraud.
5 Strategies for Lowering Online Payment Costs
Transitioning online doesn’t have to mean a massive hit to your bottom line. Use these five tools to keep fees low:
- Audit Your Merchant Category Codes (MCC): Whether you are selling a snack (MCC 5541), a tank of gas (MCC 5542), or bulk petroleum (MCC 5172), your business is categorized by an MCC. When moving online, many merchants mistakenly get lumped into a “General Retail” category. For a fuel marketer (5172), this mistake is expensive. Ensuring your online gateway is correctly tied to your specific industry code is the first step in ensuring you don’t overpay.
- Demand Transparent Pricing: Never sign an online processing contract with “Flat Rates” (e.g., a flat 3.5%). Demand Interchange Plus pricing. This ensures you pay the true cost of the transaction plus a small, transparent fee to your processor. If the card networks lower their rates, your costs drop automatically. If Interchange Plus isn’t available, Tiered Pricing is a secondary option that still allows you to benefit from cheaper payment methods like debit cards.
- Use the “Secret Weapon” (Level 2 and 3 Data): This is critical for fuel marketers (MCC 5172). When you process a business or government card online, you can provide extra data—like an invoice number or tax amount. By providing this “extra” info, the card networks recognize the transaction as lower risk and can slash your fees by up to 1.00%.
- The Power of ACH: Online portals are perfect for ACH (Electronic Check) payments. Instead of paying a $600 fee on a $20,000 bulk fuel delivery, you might pay a flat fee of just $10. Encouraging your regular B2B customers to use ACH is the fastest way to increase your margin.
- Surcharging & Cash Discounting: Modern technology makes it easy to pass the cost of credit card processing to the customer. You can offer a “Digital Discount” for those who pay via bank transfer or (where state law allows) add a small surcharge for those who insist on using high-cost rewards credit cards.
Good News: Relief Is on the Way!
The recent 2025 “Interchange Relief” litigation has provided a much-needed tailwind. Visa and Mastercard have agreed to a 10-basis point (0.10%) reduction in average interchange rates for the next five years.
Note: With Interchange Plus pricing, you benefit from this reduction immediately. If you are on a Flat Rate plan, your processor likely keeps that extra margin for themselves.
Moving Forward
Transitioning to online payments isn’t about accepting higher costs, it’s about leveraging better data. By using the right MCC codes, providing Level 2/3 data, and offering ACH options, you can give your customers the digital experience they want without sacrificing the margins you’ve worked hard to build.
