Interchange Management

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Interchange Management 2017-04-19T13:12:16+00:00

Interchange Management Services

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 300 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 300 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. In some instances, we have been able to negotiate custom interchange fees and/or performance incentives with the card networks.