Like many other financial rates, interchange rates—those fees collected by credit card banks per each transaction—do not stay the same. The amount a merchant acquirer paid in interchange five years ago, or even one year ago, is different from the current rates. This is one reason why the interchange fees on a merchant’s credit card processing statement vary.
Card associations Visa and MasterCard update the various interchange rates on a semi-annual basis.
As a result, you may see an increase or a decrease in some rates, but some may not change at all.
MasterCard, for instance, notes: “Each interchange rate has a series of requirements, all of which must be satisfied in order for a transaction to qualify for that rate.” These include: card type, transaction size, merchant industry, and how card data is physically captured by the merchant (i.e., with a magnetic stripe or an EMV chip).
In April and October of each year, Visa and MasterCard review these rates and make updates as they see fit, based on the availability of new card products, consumer responses to the previous changes, and other factors. If rates are set too high, merchants may not want to accept certain credit cards anymore, because it isn’t cost-effective, so adjusting these rates appropriately is critical.
For example: The April 2017 Visa USA Interchange Reimbursement Fees report can easily be found through the financial services corporation’s website. It contains several slight differences from the previous April 2016 Visa USA Interchange Reimbursement Fees report.
Because the credit card processing industry is largely unregulated, not only can Visa and MasterCard make changes to interchange rates without government interference, but so can merchant acquirers when charging their customers interchange fees. Consequently, consider contacting several merchant acquirers before choosing one as your merchant services provider. If you feel like you’re paying too much with your current provider, you may want to look at other options.
Remember: In order to find the best merchant account for your business, conduct some research on your own and ask the right questions.
What is interchange, exactly? Find out more about this credit card processing fee and why it shows up on your merchant statement.