Who sets interchange fees?

How much are interchange fees?

This sounds expensive! Shouldn’t I just accept cash instead?

How often do interchange fees change?

What about American Express and Discover?

How can I lower my credit card processing fees?

Who sets interchange fees?
Visa and MasterCard set the rates for interchange. Back to top.

How much are interchange fees?
Interchange fees, which are posted on the Visa and MasterCard websites, range from less than 1 percent to 3 percent plus a per item fee for various transaction types. Rates vary based on the type of industry, the type of card used and the type of sales transaction – for example, sales conducted over the phone present a higher risk of fraud than in-person transaction, so the rates are higher. Credit cards are higher than debit cards, and rewards cards are higher than standard credit cards.

Keep in mind that the interchange fees posted on the Visa and MasterCard websites are the fees that the card associations charge credit card processing companies – your costs will also include additional fees from your payment processor. Back to top.

This sounds expensive! Shouldn’t I just accept cash instead?
There are expenses associated with accepting credit cards – but there are expenses associated with accepting cash too. After all, cash transactions carry the risk of human error or theft; cashiers must count and make change accurately, and merchants must transport deposits to the bank or use a safe.  Accepting credit card payments, meanwhile, can actually increase sales by enabling cash-strapped customers to spend more on impulse buys. By working with a reputable credit card processing company, you should be able to reduce your costs and enjoy the benefits of processing credit card payments. Back to top.

How often do interchange fees change?
Twice a year, usually in April and October, Visa and MasterCard review their interchange rates and decide whether or not to revise their fee structures. Often some categories increase, while others decrease. Back to top.

What about American Express and Discover?
There are no interchange fees with American Express and Discover because in both cases, the card issuer and the acquiring bank are the same thing. However, American Express and Discover both charge merchant fees, which are often substantial. Back to top.

How can I lower my credit card processing fees?
Since interchange fees are set by Visa and MasterCard, they are not negotiable. However, you should examine your credit card processing agreement to ensure that your merchant account provider is offering you the best possible terms.

You can also lower the cost of credit card processing by taking steps to eliminate the risk of fraudulent transactions – doing so will help you receive the lowest, or “qualified” interchange rates whenever possible. For example, you should always swipe a credit card during card-present transactions; if you have to key in a card, always use Address Verification Service (AVS). Be sure to batch daily as well: your credit card processor is charged a higher interchange rate for transactions that are submitted more than two days late. Back to top.

Have more questions about interchange or credit card processing? Call 800.317.1819 to speak to an A-AAccess Merchant Services dedicated account manager today!