Simply put, there are two basic fees that collectively, make up the vast majority of the cost of a merchant account (approximately 82% on average). In the credit card processing industry, these costs are referred to as “Interchange.” They are charged by bank card networks like Visa® and MasterCard® every time a merchant accepts one of their cards for purchases.
Interchange fees are the amount that is paid to the card issuer. Dues & assessments are paid to the card associations (Visa, MasterCard, etc.).
The most important thing to note about Interchange and Assessments is that they are NON-NEGOTIABLE. They are set by Visa MasterCard and the Issuing Banks (bank that issued card to customer) and are the same for every business no matter what processor/merchant account provider they choose to use.
Rate is a percentage of the volume for each credit card transaction. (78% of total processing cost)
Composed of a flat rate for each transaction plus a percentage of the transaction amount example: $0.10/per transaction +1.75% of transaction volume Interchange is the largest chunk of your processing cost.
Interchange pricing is complex, because each card and transaction type has a unique cost, creating an assortment of over 150 Interchange rate categories. These rates will be the same no matter what processor company you use as they are determined by Visa/MC and the issuing bank based on four key items:
- Brand and type of card the customer uses (Credit, Debit, Rewards, Corporate, etc.)
- Type of business you run (Retail, Restarant, Gas Station, Hotel, e-Commerce, etc.)
- Type of transaction that was made (swiped vs keyed vs online, etc.)
- Information collected with transaction for verifications (address verification, tax amount, etc.
Fee is a flat transaction fee added to each transaction. Fees associated with Visa/MasterCard (4% of total processing cost)
Simply put, these are fees that Visa & MasterCard charge for using their networks. These fees are almost 20 times less than Interchange (Visa & Mastercard: 0.11%). Mastercard has an additional assessment called Network and Brand Usage Fee (NABU) which is 0.0185% per transaction. Visa has an additional assessment fee which is called Acquirer Processing Fee (APF) which is 0.0195% per transaction.
Set by Visa/MasterCard and non-negotiable.
Below are the links to the interchange listing by Visa and MasterCard.
The fees that credit card processors charge for their services. (18% of total processing cost)
Processor Costs are the only part of the cost which actually varies from provider to provider. It’s also the only part of the entire processing cost makeup that is negotiable for most businesses (We can’t all be WalMarts now can we?)
Payline Data is committed to educating our merchants so they can be empowered to make the right decision for their business needs.
Industry Lowest Credit Card Processing Rates
We know it’s difficult to compare offers for processing your credit card payments. We offer the best rates in the industry and guarantee that we won’t be beat on value and pricing. Our pricing is based on volume, average ticket and the types of credit card your customers pay with. Contact us for a solution that’s right for you.
How can Your Business Benefit with Interchange PLUS?
For the majority of businesses, switching to an Interchange+ pricing model will result in significant savings, and will eliminate all non-qualified fees moving forward. Other benefits include:
- Low processing costs that are normally reserved for large merchants only
- No more surcharges based on card type used
- Easy to read monthly statements with clear and concise rates
- Complete transparency so you can understand and manage your costs properly
To ELIMINATE NON-QUALIFIED SURCHARGES, Get Started Here.
To find out what option is best for you, contact one of our experienced sales professionals and have your account analyzed.
You can get started right away! Either call us directly at 1-800-284-7401, or fill out this form, and a representative will call you back within 24 hours.
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