Interchange is defined as
the fee paid from the Acquirer or payment
processor to the debit or credit card issuer for
every transaction. Interchange is the single
largest cost driver in the processing of debit/credit
card transactions, and this fee can range from
70% to 95% of the total card processing fees.
Visa U.S.A. sets the Visa Interchange rates and updates these rates twice a year. Visa has over
100 Interchange categories. These rates apply to most merchants, but lower
rates are available for merchants processing hundreds of millions of dollars in transactions.
MasterCard Worldwide sets the MasterCard Interchange rates and likewise updates its rates twice a year, typically
following Visa’s lead. MasterCard also has over
100 Interchange categories. As with Visa, these rates apply to most merchants,
but lower rates are available for merchants processing hundreds of millions of dollars in transactions.
The specific Interchange fee applied to
a transaction depends on numerous variables;
including,
- The merchant's industry type (MCC – Merchant
Category Code)
- The type of card (Rewards, Signature,
Corporate, Debit, etc.)
- The method of entry (swiped vs. keyed)
- The adherence to compliance standards
- authorization vs. settlement timing
- authorization vs. settlement $ amount tolerances
- address verification
- commercial card data element requirements
Optimized Payments uses proprietary software to sift through these Interchange fees and identify areas of potential pricing
optimization. For instance, if your business has 50 stores, we identify the locations that are experiencing downgraded transactions
and paying higher Interchange fees due to hardware/software issues or employee errors.
We’ll use our industry knowledge to increase your profitability, and we’ll manage all details, so you stay focused on core business operations
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