A transaction fee is a charge a bank applies for processing an individual payment or banking activity, such as sending a transfer, paying in cash, or making a card payment.
General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.
How a transaction fee works
A transaction fee is charged for each individual banking activity, such as sending a payment, receiving certain transfers, paying in or withdrawing cash, or processing a card payment. It is separate from a fixed charge like a monthly maintenance fee, which a bank may apply just for keeping the account open. Some business accounts bundle a number of free transactions each month and then charge a fee for each one above that allowance, while others charge per transaction from the start or waive fees if a balance condition is met. The exact charges depend on the bank and the account, current as of 14 June 2026.
Common types of transaction fee
Transaction fees can apply to many activities. Electronic payments such as a CHAPS or wire transfer often carry a per payment charge, while everyday transfers may be free or charged depending on the account. Cash handling, such as paying in or withdrawing notes and coins, is a common source of transaction fees on business accounts. Card acceptance carries its own per transaction charges through a merchant account. International payments may add a foreign exchange markup on top of a fixed fee. Each of these is set by the provider and can differ by account type.
Why it matters to a business
Transaction fees can add up for a business that makes or receives many payments, so the headline monthly fee is only part of the cost of running an account. A business that handles a lot of cash, sends frequent transfers, or processes many card payments may pay more in transaction fees than in fixed charges. Because allowances and per item charges vary widely between providers and account tiers, a business should compare the full fee schedule against its expected activity rather than the monthly fee alone, and confirm current charges with the provider before opening an account.
Frequently asked questions
What is a transaction fee?
How is a transaction fee different from a monthly fee?
Do all business accounts charge transaction fees?
How can a business reduce transaction fees?
Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 14 June 2026. Confirm current terms with the provider before applying.