Interchange / Pricing
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What is Interchange?
Interchange is the underlying cost of all credit/debit sales. Interchange is the fee that's paid back to your customer's issuing bank. There are hundreds of potential rates.
Who defines interchange?
Interchange is defined by the card associations: Visa, MasterCard, and Disvoer. Interchange is the "base rate" that all merchants pay.
What is interchange-plus pricing?
Interchange-plus pricing is a pricing model where constant margins are added to the wholesale interchange rate. It's considered one of the fairest and most transparent models.
What is membership pricing?
Membership pricing is a form of interchange-plus pricing, that is simpler to understand, and removes some of the "variability" of standard interchange-plus models.
What are card-association fees?
Card association fees are the costs that are paid back directly to the card brands: Visa, MasterCard, Discover and American Express. Like interchange, all merchants pay these.
Where can I see the interchange fees?
Visa/MasterCard publicly post and update their interchange tables on a semi-annual basis. Interchange can get complex and confusing, so click through for a full explanation.
How do I predict what my interchange fees will be?
You can't predict interchange with 100% accuracy. But knwoing your customer base and analyzing your historical acceptance trends can give valuable insights into future rates.
How do I reduce my interchange fees?
There are several strategies to reduce fees that will depend on your business type. Encouraging debit, in-person transactions, and B2B processing are great starting points.
Are there interchange fees for debit?
Yes, debit cards have interchange fees. However, they're typically significantly lower than credit cards. Most debit cards have interchange rates of only 0.05% + 22¢ per sale.
Do EBT sales have interchange fees?
No, EBT sales have no underlying interchange rates. As they're backed by the federal government, the only fees you pay are a per-transaction cost to your processor.