Interchange+

Stopping Power Pricing

Interchange+, a wholesale pricing model, is typically the most cost effective option for businesses.

0.35%

0.40%

$0.15

$24.95

V/M/D

AMEX

per Trans

per Month

* Monthly Fee includes ALL costs associated with account

* Other providers processing for FFLs disclose only a portion of monthly fees, or bill merchants under an Enhanced Interchange/Differential pricing model

Interchange is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant’s bank (acquiring bank) pays a customer’s bank (issuing bank).

 

In a credit card or debit card transaction, the card-issuing bank in a payment transaction deducts the interchange fee from the amount it pays the acquiring bank that handles a credit or debit card transaction for a merchant. The acquiring bank then pays the merchant the amount of the transaction minus both the interchange fee and an additional, usually smaller, fee for the acquiring bank or independent sales organization (ISO), which is often referred to as a discount rate, an add-on rate, or pass-thru. These fees are set by the card-issuing banks credit card networks, and are the largest component of the various fees that merchants pay for the ability to clear card payments through the ACH.

 

Interchange fees have a complex pricing structure, which is based on the issuing-bank, card-brand, regions, jurisdictions, type of card, type & size of the accepting merchant, & the type of transaction (e.g. online, in-store, phone order, whether the card is present for the transaction, etc.).

Interchange Fee

The fee paid to the card issuing bank by the card acquiring bank by way of the card brands. Interchange rates vary widely based on card type, transaction amount, risks and retail sector. Interchange is assessed on all Visa and MasterCard branded credit and debit cards.

Assessments

These are the fees the card associations collect for each transaction. These fees make up a smaller portion of your total card processing costs than interchange fees. Assessments are based on a percentage of the total transaction volume for the month.

Discount Rate

In relation to Interchange + pricing the discount rate is the % mark-up above the wholesale percentage (interchange) assigned to a specific card which a merchant pays to process card payments.

Basis Point

A basis point (measured in 1/100th of one percent) is used in expressing differentiation in interchange rates where differences of less than one percent are common.

Durbin Amendment

A 2011 law that limits the transaction fees that large debit card issuers can charge merchants. A 2011 ruling by the Federal Reserve set the cap at 21 cents per transaction, plus 0.05 percent of the transaction amount. Only financial institutions with at least $10 billion in assets are subject to the law. Sen. Richard J. Durbin introduced the amendment as part of the Dodd-Frank Wall Street Reform and Protection Act.

FANF

(Fixed Acquirer Network Fee, specific to Visa)
Visa devised the FANF to circumvent lost revenue from the Durbin Amendment that instated new regulations regarding payment processing. A flat fee based on your volume per month, type of business (Merchant Category Code or MCC), number of locations, type of transaction (card present vs. card not present).

NABU

(Network Access Branding Usage, specific to MasterCard)
This fee is assessed to all sales and return transactions, processed by a US merchant, with a MasterCard Credit or Signature Debit card.

CPS

CPS is an acronym which stands for Custom Payment Service and is associated with Visa’s interchange categories. Visa’s CPS allows a business to qualify transactions to an interchange category with a lower rate by following a set of rules.

Merit III

The “Merit III” category encompasses traditional consumer credit cards, as opposed to business/purchasing cards which meet the following qualifications.

  • Magnetic stripe, contactless, or chip data read, obtain customer’s signature
  • Authorized and settled within 1 day
  • Obtain and pass 1 valid electronic authorization
  • Authorization and settlement MCC must match
  • Authorization must be within 10% of settlement value
Merit I

The Merit I category is for keyed-entry and ecommerce Mastercard sales which include AVS (Address Verification System) and meet the following qualifications.

  • Authorized and settled within 1 day (keyed) or 2 days (ecommerce)
  • include AVS (Address Verification System)
  • Authorization and settlement MCC must match
  • Authorization must be within 10% of settlement value

Debit - Card Present

Regulated (CPS)
0.05% + 22¢
Reg. Business
0.05% + 22¢
Non-Reg (CPS)
0.80% + 15¢
Prepaid
1.15% + 15¢
Business
1.70% + 15¢
Regulated
0.05% + 22¢
Reg. Business
0.05% + 22¢
Non-Regulated
1.05% + 15¢
Prepaid
1.05% + 15¢
Business
1.80% + 10¢
Regulated
0.05% + 22¢
Reg. Commercial
0.05% + 22¢
Non-Regulated
1.10% + 16¢
Prepaid
1.10% + 16¢
Commercial
2.30% + 10¢

Debit — Card Not Present

Regulated (CPS)
0.05% + 22¢
Reg. Business
0.05% + 22¢
Non-Regulated
1.65% + 15¢
Prepaid
1.75% + 20¢
Business
2.45% + 10¢
Regulated
0.05% + 22¢
Reg. Business
0.05% + 22¢
Non-Regulated
1.65% + 15¢
Prepaid
1.76% + 20¢
Business
2.65% + 10¢
Regulated
0.05% + 22¢
Reg. Commercial
0.05% + 22¢
Non-Regulated
1.75% + 20¢
Prepaid
1.75% + 20¢
Commercial
2.95% + 10¢

Credit — Card Present

CPS Retail
1.51% + 10¢
Traditional Rewards
1.65% + 10¢
Signature Preferred
2.10% + 10¢
Corporate
2.10% + 10¢
Business
2.20% + 10¢
Signature
2.30% + 10¢
Consumer Merit III
1.58% + 10¢
Enhanced
1.73% + 10¢
World
1.77% + 10¢
Business
1.90% + 10¢
World Elite
2.20% + 10¢
High Value
2.20% + 10¢
Retail Core
1.56% + 10¢
International
1.70% + 10¢
Rewards
1.71% + 10¢
Premium
1.71% + 10¢
Premium Plus
2.15% + 10¢
Commercial
2.30% + 10¢

Credit — Card Not Present

CPS Retail
1.80% + 10¢
Rewards
1.95% + 10¢
Signature Preferred
2.30% + 10¢
Signature
2.70% + 10¢
Business
2.25% + 20¢
Corporate
2.70% + 10¢
Merit I
1.89% + 10¢
Enhanced
2.04% + 10¢
World
2.05% + 10¢
World T&E
2.30% + 10¢
World Elite
2.50% + 10¢
High Value
2.50% + 10¢
Core
1.89% + 10¢
Secured Rewards
1.95% + 10¢
Rewards
2.00% + 10¢
Premium
2.00% + 10¢
Commercial
2.300 % + 10¢
Premium Plus
2.40% + 10¢

Interchange Rates

Retail
< $75
1.60% + 10¢
< $1,000
1.95% + 10¢
> $1,000
2.40% + 10¢
Prepaid
< $100
1.35% + 10¢
< $1,000
1.70% + 10¢
> $1,000
2.40% + 10¢
International
< $100
1.70% + 10¢
< $1,000
2.05% + 10¢
> $1,000
2.50% + 10¢
Travel & Entertainment
< $100
2.25% + 10¢
< $1,000
2.60% + 10¢
> $1,000
3.60% + 10¢

AMEX Card Not Present Fee: 0.30%