What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
Federal agencies paid about $784 million in card acceptance fees in fiscal year 2023, according to the U.S. Government Accountability Office (GAO). Those fees covered more than 85 federal entities and about $43.6 billion in payment-card revenue, averaging $1.06 per transaction and 1.8% of revenue. The hidden part of the bill is structural. The largest layer, interchange, is paid to the card issuer, and a new website or a different processor does not remove it.
Modernization has real benefits, and they are covered below. But the cost picture sits in the fee structure, the legal rules and the contract terms that lie underneath any new payment channel.
What federal agencies paid in FY 2023
GAO’s figures describe fiscal year 2023 and appear in its report GAO-25-107298, published April 30, 2025. They describe that year only, and later fiscal years may look different.
| Measure (FY 2023, GAO data set) | Value | Scope note |
|---|---|---|
| Card fees paid | About $784 million | More than 85 federal entities |
| Payment-card revenue | $43.604 billion | Same data set |
| Transactions | 743 million | Same data set |
| Average fee per transaction | $1.06 | Average across the data set |
| Fees as a share of revenue | 1.8% | Fees divided by card revenue |
| Treasury Bureau of the Fiscal Service (BFS) fees | About $312 million | 153 million transactions; $18.602 billion in revenue |
| BFS interchange and network fees | About $299 million | GAO summary breakdown |
| BFS processing and other fees | About $13 million | GAO summary breakdown |
The Treasury line deserves a closer look. Dividing its fees by its transactions gives roughly $2.04 per transaction, above the $1.06 average for the full data set. Interchange and network fees together make up about 96% of its fees ($299 million of $312 million). These are simple calculations from GAO’s totals, not figures GAO states. The $299 million combines interchange and network fees, so it cannot be read as interchange alone.
Free tools Windows power users keep installed
One-click scans. No signup required.
#1 Best Overall
- With Square Terminal, you can ring up sales, accept payments, and print receipts, all with one device. Use it at the counter or ring up customers anywhere in your store.
- Accept all major credit and debit cards and pay one low rate with no hidden fees and no long-term contracts.
- Process chip cards in just two seconds.
- Get your money as soon as the next business day.
- Use it cordlessly with the built-in battery, designed to last all day.
Scope of the federal figures
GAO’s detailed cost work examined seven selected entities along with Treasury data. The report describes the Treasury data as representing an estimated 81 federal entities, and its fee total spans more than 85 entities. The report is not a census of every public payment channel, and its findings should not be extended to state or local governments.
The interchange finding is also limited to those selected entities. GAO puts it this way: “Interchange fees accounted for nearly 90 percent of the fees selected entities paid in FY 2023.” (U.S. Government Accountability Office, GAO-25-107298, published April 30, 2025.)
Purchase-card refunds are a separate number
GSA SmartPay refunds totaled $488 million in FY 2023 against $37 billion in net eligible spending, according to GAO. Those refunds come from the employee purchase-card program. They are not an offset to the public acceptance fees above, and they should not be subtracted from the $784 million figure.
How the fee layers work
The fee an agency pays on a card sale is usually a combination of charges, collectively called the merchant discount fee. GAO describes a typical Mastercard or Visa transaction as carrying three layers. The exact participants and settlement arrangements vary by network and by entity, so the layers below are GAO’s general framework rather than a fixed schedule.
Interchange
Interchange is paid to the card issuer and is the largest layer, as the federal figures above show. Because it is the biggest component, an agency that changes only its processor leaves most of its cost in place.
Rank #2
- Get your money as soon as the next business day.
- Get set up quickly with no long-term commitments. Download the Square Point of Sale app for free, create an account, and start taking payments anywhere.
- Run your business all in one place with the free Square Point of Sale app. Track your sales, manage inventory, accept tips, send receipts digitally, and more.
- Works with Apple devices with a Lightning connector.
Network fees
Network fees are paid to the card network. For the selected entities they are a smaller layer than interchange, and in Treasury’s breakdown they are grouped with interchange in the $299 million figure.
Processing and acquirer fees
Processing and acquirer fees pay for routing each transaction and related services. This is the layer tied to the processor or acquirer an agency chooses, which is why GAO lists comparing processors among the levers agencies used. Treasury’s processing and other fees totaled about $13 million of its $312 million.
How Treasury settles
Settlement mechanics affect how the cost appears in an agency’s books. GAO reports that Treasury’s Bureau of the Fiscal Service settles transactions “at par” and pays acceptance costs separately. As GAO describes it, the collected amount is settled in full and the fees show up as a separate expense rather than being netted out of the deposit. Agencies with other arrangements should check their own books rather than assume this one.
The Tool Desk
Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →What modernization can and cannot change
Modernizing payments does real work. Online, point-of-sale and other electronic channels reduce the administrative load of handling cash and checks, and they meet customers’ expectation of paying by card. GAO notes both as benefits of card acceptance.
Those benefits sit beside a cost base that stays in place:
Rank #3
- USB Magnetic Card Reader Credit Card Reader,Memory Chip Card Reader Contactless NFC Chip Card Reader.Attention: it's magnetic carder read only! not encoder!
- Support to read magnetic card(no writting function) all 3 tracks, support to read SLE4442 chip card, Contactless NFC Chip Card,CPU chip card(APDU command is required for deep development).
- 2 lights on when connected, green light flashing when swiping.Work both as keyboard emulator(active mode/auto-reading mode) and support read by software(passive mode/HID mode).
- 3 Reading Modes: Two-way Swipe Magnetic Card Reader.Insertable Chip-reading Card Reader.Left side Contactless NFC Chip Card Reader( Turn on the left switch).
- The card reader is widely used for membership system, check-in checkout system, installed with KIOSK machine to read write card ect. If you have any question, feel free to contact our support team for technical support, we're always ready for you!
- Interchange, network, and processing or acquirer fees on each card transaction
- Fraud prevention controls
- Infrastructure, equipment, and the software that connects to processors
- Operations and staff time for reconciliation, reporting, and accounting
Moving a payment to a new channel removes none of these fee layers, and GAO’s findings do not show that digitization alone lowers total fees. An online channel can shift a fee to the payer only where a lawful and contract-compliant arrangement allows it, as covered in the legal section below.
Cost levers agencies have tried
GAO found selected federal entities using several levers to reduce or control card costs. The reported results come from the entities themselves and depend on each contract, card network, and transaction mix, so treat them as examples rather than a playbook.
| Lever | What GAO reported | Limits to note |
|---|---|---|
| Meeting volume thresholds | Five entities reported reducing fees by meeting volume thresholds. | Applies only if volume reaches the threshold. |
| Pricing model and merchant category review | Entities reviewed merchant category treatment and pricing models. | Useful only if category assignments match the actual line of business. |
| Debit routing | Eligible debit transactions routed over lower-cost networks. | Eligibility and results depend on networks, rules, and technical capability. |
| Card type and transaction limits | Entities restricted specific card types or transaction amounts. | Narrows what payers can use. |
| Transaction analysis | Entities analyzed transactions to find cost drivers. | Requires data and staff capacity. |
| Processor and acquirer comparison | Entities compared processors and acquirers. | Affects the processing layer only; it does not address interchange, which dominated fees for the selected entities. |
Negotiation is the other side of the ledger. Two entities described difficulty navigating network rules, and two reported unsuccessful network negotiations. A lever that looks available on paper may not be open to a given agency.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Who can pass card fees to the public?
Not every government can surcharge card payments. Whether it can depends on the jurisdiction, the type of obligation, and the contract, and the answer differs across federal, state, and local programs.
Federal rules
GAO reports that IRS card-payment fees are borne by taxpayers under the applicable authority. It also identifies a separate statutory fee at the Defense Commissary Agency. BFS officials told GAO they were unaware of general surcharge or convenience-fee authority for other entities using the Card Acquiring Service, apart from that statutory exception. In the federal examples GAO describes, a payer-side fee rests on a specific statute rather than a general power.
Rank #4
- MSR90 is a USB emulation keyboard interface that not need any driver or software,USB simply plug and play
- Reads up to 3 tracks of information,can reads ISO7811, AAMVA, CA DMV and most other card data formats
- Threaded inserts for mounting. LED indicator, green light is on when connecting,green light blinks when cards swiped
- Bi-directional swipe reading, superior reading of high jitter, scratched, and worn magstripe cards, reliable for over 1,000,000 card swipes
- Configuration software makes configuration changes easy,works with: Windows OS and Mac OS
A state example: Florida
Florida Statutes section 215.322, in its 2026 codification, shows what a state-level rule can look like. As described, covered local governments must accept specified card and electronic-funds-transfer payments, must have an online acceptance method, and are authorized to surcharge specified types of obligations in an amount sufficient to cover service fees. This is one state’s rule, not a national one.
Other jurisdictions
Other states and localities may set different rules, and contracts and card-network rules can add limits on top of statute. Any real decision needs current review of the jurisdiction’s law, the network rules that apply, and the processing contract.
What a state operations review adds
An older Delaware state review offers operational lessons rather than national rules. It recommends checking whether merchant category assignments fit the agency’s actual line of business, using available fraud-prevention measures for card-not-present payments, monitoring how transactions qualify for pricing and how they are batched, and assessing processor costs alongside reporting and accounting needs.
The review also includes contract savings estimates. Those apply to the contract it reviewed. They should not be used as a benchmark for another agency’s contract, and they may not reflect current terms.
How to test a modernization proposal
Before accepting a claim that a new payment system will save money, ask for the following.
Quick Recap
- Split the current cost into layers. Request interchange, network, and processing or acquirer fees separately, as GAO did for the selected entities. A single merchant discount figure hides which layer a change could actually affect.
- Express the cost two ways. Report it per transaction and as a share of collections, the same two measures GAO used.
- Document a baseline. A savings claim can only be verified against measured current costs, not an estimate of them.
- Confirm authority before adding any payer fee. Check the statute, network rules, and contract terms first.
- Model the transaction mix. Include volume tiers, debit routing eligibility, the card types accepted, and the share of card-not-present payments.
- Count the non-fee costs. Settlement, reconciliation, reporting, fraud controls, hardware and software, and staff workload all belong in the comparison.
- Measure the payer side. Track customer experience and confirm that non-card options remain available where they are needed.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
