For businesses, the cost of credit card processing can be expensive once you take into account the multiple fees charged by the parties involved. One of the major fees that businesses need to pay is the interchange fee, which is charged per transaction. These fees cover the risk of fraud and the cost of handling transactions shouldered by the card-issuing bank.
Although some credit card fees are negotiable, interchange fees are fixed. This flat-rate figure is expressed as a percentage of the total amount charged, including the taxable amount. Many variables contribute to the rate of interchange fees, but the average interchange fee comes out to around 2% of every purchase in the United States.
Interchange fees can vary depending on the country of your acquiring bank, so this is something to keep in mind as you calculate processing costs. In addition, rewards cards and corporate cards tend to have higher interchange rates compared to regular credit cards.
As one of the three major types of credit card processing fees, there are many factors that can impact your interchange rate:
Although interchange rates are fixed, credit card associations tend to update their rates and fees in April and October of each year. However, it’s important to stay up to date with any changes that can occur throughout the year.
Learn more about which online payment processors charge the lowest interchange rates for your business at Processing Card today.
Wilbur Graham has been writing about mobile payments and POS systems since 2012. He got his degree in Marketing at California State University.
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