PROCESSING FEES

For years, FEC operators worried about rent, payroll, redemption costs, and game prices. But in 2025, one of the biggest hits to profitability isn’t coming from your vendors or your labor line… it’s coming from something most operators overlook:

Credit-card processing fees, Tap-to-pay surcharges, Mobile wallet interchange changes, and Massive increases in small-ticket swipe volumes.

This might be the single most overlooked expense on an FEC’s P&L today and most operators don’t realize how much it’s costing them.

Why Fees Are Rising (And Why It Matters More for FECs Than Almost Any Other Industry)

1. Interchange fees have climbed across Visa, Mastercard, Discover, and AmEx.

Certain categories, especially micro-transactions, have higher percentage fees. Mobile wallets (Apple Pay, Google Pay, tap-to-pay) can be even higher based on merchant category code (MCC).

2. Debit card systems = thousands of individual transactions.

A typical FEC with 50–100 games generates:

• 30,000 to 60,000 transactions per month

• Each transaction hitting your processor

• And each carrying a fee

FECs get punished simply because every play is a “sale.”

3. Guests now overwhelmingly pay digitally.

Cash is practically gone. Credit, debit, and contactless payments dominate:

• Tap-to-pay

• Mobile wallet

• Chip insert

• Online birthday-party deposits

• E-commerce sales

• Self-service kiosk reloads

The shift is great for convenience — but terrible for fees.

What This Really Means for Your Game Room

Scenario: A guest buys a $20 card.

Typical fees in 2025: 2.7%–3.2% + $0.10–$0.15 per transaction

On a $20 card reload, you net:

• $20.00 gross

• minus ~$0.60 in processing

• minus $0.10–$0.15 transaction fee

• = net $19.25 or less

Multiply that by thousands of reloads per month.

Suddenly your FEC loses thousands per month and five-figures per year just to processing fees.

It Gets Worse for FECs Because of “Micro-Transaction Math”

Birthday party deposits ($250–$500) aren’t what’s killing you.

It’s the constant $5–$10 reloads.

With small-dollar sales:

• The percentage fee doesn’t scale well

• The per-transaction fee becomes enormous on a per-dollar basis

Example: A $5 reload with a $0.12 transaction fee = 2.4% loss before the percentage fee is even applied.

This math compounds monthly.

The New Problem: Premium Tap-to-Pay Categories

We’ve seen an industry-wide increase in:

• Tap-to-pay

• Apple Pay

• Google Pay

• Samsung Pay

• Mobile wallet “premium category” fees

These can run 0.2%–0.5% higher than standard cards.

On millions of swipes per year? That delta shows up in your net earnings.

Higher Fees = Lower Payout Flexibility

Every 0.1% increase in processing fees impacts:

• Your payout percentages

• Your revenue-share splits

• Your redemption margin

• Your cost of goods

• Your ability to price games aggressively

Some operators don’t adjust and they eat the difference. The smart operators build it into pricing and payout strategy.

“Why Are My Revenues Down Even Though Visits Are Steady?”

This is the #1 question operators ask in 2025.

Credit-card fees are a silent margin killer. You won’t see it on the game report. You'll only notice it when:

• Bank deposits look light

• Month-end revenue isn’t matching swipe volume

• Pay-per-play math feels “off”

• Payout % adjustments aren’t yielding expected returns

It’s death by a thousand cuts.

What Operators Can Actually Do About It

Here are the real-world responses FECs are deploying in 2025:

1. Reload Minimums

Force $10 or $20 minimum reloads. This reduces per-transaction volume and increases net average reload size.

2. Offer a “Cash Reload Discount”

Example: Pay $20 cash → get $22 in play.

This is legal and avoids surcharge complications.

3. Bundle Offers

Encourage $40–$60 purchases with bonus play. Larger loads dilute the transaction fee.

4. Kiosk Pricing Optimization

Align game card pricing to factor fees into:

• Start-up card cost

• Reload tiers

• Promotional bonuses

5. Surcharge or fee recovery (where allowed)

Some FECs now charge:

• A “small convenience fee” for credit-card purchases

• A kiosk fee

• A digital payment fee

Regulations vary by state — but it’s becoming more common.

6. Track fees as a P&L line item

Stop burying it in bank fees. Operators need visibility to adjust pricing properly.

The Bottom Line

FEC operators are seeing:

• Lower net revenue

• Higher operating costs

• Reduced margins

• More pressure on payout %

• Less room for error

Not because guests are spending less…Not because games aren’t performing…But because processing fees are climbing every single year, while transactions explode.

This is one of the most important financial issues FECs should be talking about right now.