Interchange Guide

A Guide to Negotiating Merchant Account Interchange

For the Best Merchant Rates Insist on a Detailed Interchange Rate Quote

  • ALL merchants large and small can get an Interchange rate price structure to lower their costs.
  • We quote your Merchant Rates without monthly minimum fees, batch fees, AVS fees, annual fees, non-qualified surcharge fees, and other hidden fees. Plus Interchange is returned to you on cardholder credits further lowering your bottom line costs.
  • Use the MerchantRates.com calculator tools to modify your quote by changing your fee selections.
  • Print your proposal and the merchant application and terms and conditions.
  • Don’t choose a payment card processing provider until you receive a detailed Interchange rate quote.

Start With an Understanding of Interchange

  • Learning about Interchange will give you the knowledge you need to negotiate your best merchant rates. Interchange is the largest component of your discount rate pricing. Interchange fees are paid to cardholder-issuing banks and these rates are set by MasterCard and Visa card associations and the Federal Reserve. Interchange pricing depends on:
    • Your industry category
    • Your card acceptance method
    • The type of card you accept
  • Small and mid-sized businesses must insist on an Interchange pricing method just as the largest merchants already pay to get the best bottom line processing costs.
  • Two opposing views of Interchange can be studied below
    • The Electronic Payments Coalition is a broad-based group of payment card networks, financial services companies and financial services trade associations whose primary goal is to educate policy-makers, consumers and the media about the value of electronic payments systems. They promote protecting consumer value, choice and competition in electronic payments systems.
    • The Merchants Payments Coalition, which counts 13 trade groups among its members, including the National Retail Federation, is working to regulate the fees card-accepting merchants pay issuing banks.

We’ve Identified the Interchange Rates for your Industry by Charge Type

  • Your MerchantRates.com proposal contains tabs that detail your Interchange quote.
    • You will accept a diverse mix of credit and debit cards for payment from your customers.
    • Specific card types include signature debit, rewards, enhanced, world, business and corporate.
    • Interchange fees are returned on cardholder credits.
  • The types of cards you accept play a role in determining your overall processing expenses.
    • There are nearly 400 million Visa check cards in the market. Make sure you compare quotes for credit and check card rates independently.
    • 2/3 of consumers have a rewards credit card, many with 2 or more. If you are not being quoted a rewards card rate, carefully examine the fine print for the definitions of mid/non qualified rates!
    • Visa transactions may account for nearly 70% of your bankcard acceptance. Consider card market share and price structure when comparing quotes.
  • Certain industries qualify for reduced incentive Interchange pricing levels. Examples include supermarkets, business-to-business, schools, non-profits, restaurants and more.
  • For existing businesses, one of the keys to lowering your cost of accepting credit and debit card payments is to calculate your real rate and then run comparisons to find the average monthly credit card merchant fees for your industry.

Get All Merchant Rate Quotes In the Same Format

  • Get merchant account rate quotes for MasterCard, Visa and Discover separately and inquire if any incentive rates are available.
  • It can be difficult to compare merchant services quotes from one provider to the next. The problem is that most merchant account providers quote a qualified “rate as low as” price then surcharge “non-qualified” transactions.
  • Visa and MasterCard publish their Interchange rates so you can monitor these costs.
  • The transparency of Interchange with a mark up to cover the merchant services delivery costs of network communications, risk management, customer service, account funding and reporting is your best pricing method. Identifying merchant service providers that simply pass through Interchange will make it easier to compare rate quotes.
    Compare what Vantage offers:
    • True month-to-month agreement
    • Personal attention from your very own account manager
    • Accept credit cards on your own terms, set your own processing fee structure and monitor it using the MerchantRates.com quote calculator.
    • Earn Vantage Points when you accept bankcards and reward yourself.

Read the Merchant Agreement Fine Print

  • Three-year contract terms are normal and early termination fees can run from hundreds of dollars to tens of thousands of dollars. Don't settle for the term and termination fee being waived; true month-to-month agreements are available.
  • For most merchants, taking simple steps goes a long way toward protecting their interest.
    • Recognize that there is contact fine print governing the operation of your merchant account.
    • Obtaining a copy of the legal T&C before signing the application.
    • Read all the numbered headings and make sure you have a full copy not a summary.
    • Pay close attention to the term and termination section.
    • Discover who has authority to legally waive contract terms.
  • Contract language also plays an important role in determining your true cost of service. Consider the difference:
    • Pay for all authorization attempts vs. only settled transactions.
    • Different ways companies define Mid-Qualified and Non-Qualified rate surcharges.
    • Will the Interchange fees be returned when issuing cardholder credits?
  • READ and understand the fine print before you select a merchant services provider and establish your merchant account. An easy way to stop the corruptive practices that arise from contracts with termination fees is for merchants to stop awarding their business to those who “waive” fees vs. presenting agreements without the fees in the first place.