Short answer
One basis point is one hundredth of a percentage point: 0.01%. 25 basis points is 0.25%.
Payments people quote markups and rate differences in basis points because the numbers are small and the volumes are large. On $25M a year of card volume, every basis point is worth $2,500, so a 30 bps difference in effective rate is $75,000 a year.
See what a lower rate is worth at your volume in the Stripe fee calculator, and the ways to get there in how to reduce credit card processing fees.
Part of our guide to how to reduce card processing fees.
Related terms
- Effective rate: Your total processing fees divided by your total card volume for the same period: the one number that makes any two pricing setups comparable.
- Processor markup: The part of a card fee that your processor keeps, on top of interchange and card network fees.