According to Oxford, Interchange is
the action of interchanging things, especially information:
“a free-market interchange of goods and services”
That’s pretty close, In merchant services parlance, interchange is a fee that is set by the credit card networks, charged to merchant services providers, passed along to merchants and paid to the issuing banks for the acceptance of payment card transactions.
What’s interesting is that these fees are set by the card networks, and are the same for all merchants of the same type. In other words, Interchange is the level playing field between all parties. If you are a “fast-food establishment” then you have the same interchange as the big boys, like McDonalds. You can download Visa’s interchange fees, right here, and MasterCard’s fees right here.
Card Association Fees
In addition to Interchange fees that the merchant service provider must pay to the issuing bank, there are fees that are charged by Visa/MasterCard/Discover. There are several different fees that they assess, that are based on many factors, like the amount of volume you process per month, whether or not your customers physically present the card to you, the types of security precautions you take, possible international surcharges, and others. Since many of these fees depend on the circumstance of each transaction, they’re impossible to predict with 100% accuracy. However, the basic fees that the card associations charge are roughly 0.12% of volume, and $0.02 per transaction. Just like the rates that merchant service providers must pay to card-issuing banks, these fees are paid by all providers
The bottom Line
Add to this the “plus” or “mark-up” your card processor charges, plus their monthly fees for equipment, PCI, and statements, etc. and you have your bill. You can’t negotiate Interchange or card association fees. However, you can negotiate all the other fees.
Headquartered in Pinole California, MerchantZoom, Inc. was founded by Wally Arakozie. Previously employed by one of the largest merchant processing companies here in California for nearly a decade. Since the company’s beginnings MerchantZoom, has grown into a reputable national merchant provider. Along with delivering state of the art technology and competitive rates, MerchantZoom, thrives on personalized local customer service and support. In order for your business to ZOOM!
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Content Release Date Feb 27, 2017 – MerchantZoom Inc.
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