Interchange RatesExplained

MasterCard©, Visa© and Discover© set fees to accept the various types of cards offered. The fees vary by industry type and card type, and are the majority of your processing cost. These fees are referred to as Interchange.100% of Interchange fees go back to your customer’s card issuing bank for processing the transaction. All Banks and credit card companies have the same Interchange cost, which could be considered the wholesale cost of processing a transaction. True Interchange pass-through price structure is the most cost effective structure to date for merchants, as all fee categories are simply passed through at cost. Any charges above Interchange cost are paid to the payment processor for performing settlement, risk underwriting, network infrastructure, customer service, equipment deployment and other backend functions. All other rate structures will lead to added cost for merchants. As an educated merchant, you should settle for nothing else. It is no coincidence that all larger merchants are on this price structure.

Are there Interchange categories called "Mid-Qualified" or "Non-Qualified"? There are no such fee categories issued by Visa©, MasterCard@ or Discover©. These are qualification tiers that are set up at a processorlevel. These categories can be viewed as buckets where processors will group many Interchange fee categories together. The processor then sets a surcharge for that bucket that will cover the highest downgrade plus add profit. This price structure can be costly to merchants as often times the surcharges are three to four times higher than the actual Interchange fee category.

Does Merchant Department provide any other price structure beyond Interchange Pass-Through? No. We urge every merchant to insist on true Interchange Pass Through. Whether you choose Merchant Department or another processor, Interchange Pass Through is the most cost-effective pricing structure currently available. How do I know if I am on True Interchange Pass-Through? Often times processing statements are confusing by design. We are constantly amazed my the convoluted and deceptive statements we see every day. Visa© and MasterCard© publish new interchange rates every April and October. Click the links to view the latest Interchange fee categories, or fax your statement to us at 561.404.0303 and our Interchange experts will go through your statement line by line to make sure your Interchange qualifications are not being manipulated, and you are not being overcharged.