Interchange

.62%-3.25%

  • Makes up the largest component
  • Has the greatest impact on your overall cost
  • Is set by the networks (Visa, MasterCard and Discover)
  • Is non-negotiable
  • Sets the rules on how a transaction clears
  • Is charged to the merchant
  • Is paid to the issuing bank (the bank that issued consumers credit card)
  • The Issuing Banks’ cut
  • While it is the largest cost factor, it is manageable!
  • Visa Interchange Rate Sheet
  • MasterCard Interchange Rate Sheet
  • Discover Interchange Rate Sheet
  • American Express does not use interchange

Merchants that process a lot of phone/mail orders can easily reduce their interchange fees by .40% or more. Merchants that process a lot of Corporate, Business and Purchasing cards can easily reduce their interchange fees by .70% – 80% or more.

In order to maintain the lowest cost, you must manage the largest expense. If your merchant account provider (Bank/Processors/ISO) says they have an interchange management program. Ask for details in writing of how it works and for references of merchants that have used it.

Dues & Assessments

.10% – .12%

  • Makes up the second largest component
  • Has the second greatest impact on your overall cost
  • Is set by the networks (Visa, MasterCard and Discover)
  • Is non-negotiable
  • Has nothing to do with how a transaction clears
  • Is charged to the merchant
  • Is paid to the networks (this is the part of the fee that Visa, MasterCard and Discover makes)
  • Visa, MasterCard and Discovers’ cut
  • It is not manageable
  • The networks also collect a few very insignificant fees such as Risk, Zero Limit, NAUBA, etc. which have next to zero impact on the average merchant

Discount Rate

.01% – 4% or more!

  • Should be the smallest component, however, it usually makes up the largest component
  • Is set by the processor or ISO
  • Is negotiable Has nothing to do with how a transaction clears
  • Is charged to the merchant
  • Is kept by the processor and or ISO
  • Processor and or ISO’s cut

Unlike Interchange and/or Dues & Assessments that have a set pricing, Discount is the part of the transaction that is anything goes. The less the merchant understands the more they will pay. There is no limit/cap on the fees the merchant account provider can charge. Nor does the processor have to disclose their discount rate which makes it easier for them to charge anything they want (the old saying goes, “what the market can bear”). This is what the merchant can bear.

Surcharges

.10% – unknown

Merchant Account Providers can use several deceptive billing tactics to charge .10% and up to an unknown amount. How do you get an unknown? When Merchant Account Providers leave out the transaction volume on the downgrades making it impossible to calculate the downgrade surcharge rate. This makes it an unknown fee, which we can only assume is the worst of them all. Go to: Top 6 Indicators You’re Being Cheated to learn more.