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Optimizing Interchange Rates & Fees

While interchange fees don’t vary among processors, you do have some control over and you can optimize some of the interchange charges you are paying to lower your costs. Interchange fees comprise the biggest chunk of a business’s credit card processing costs so it becomes urgent to make sure that the bulk of your credit card transactions qualify for and are routed to the lowest category as frequently as possible. The good news: you can modify your business processing steps to get the lowest possible interchange costs.

By definition, the process of categorizing any single transaction is called interchange qualification and it happens with each and every transaction you process. Quite a few factors help determine where a transaction qualifies at interchange, deciding where it will be routed. You as a merchant can control or influence some of these and others are out of your control.

Merchant-influenced factors:

Processing Method – there is one of two ways to process a credit card transaction.

  • Card-present – the merchant reads the customer’s credit card data electronically, also called electronic data capture. This interchange category carries smaller fees than the alternative, card-not-present.

  • Card-not-present – the customer’s credit card information must be entered manually or is provided by the cardholder using a gateway or portal.

Transaction data – the completeness of the information supplied during a credit card transaction affects how it qualifies during interchange. This is particularly important if you are processing card-not-present transactions and for merchants dealing with corporate and government-enhanced data.

Merchant Category Code – There are certain interchange categories for businesses listed under particular merchant category codes (MCC).

Unmanageable factors:

Card type – there are separate interchange categories (and

therefore different fees associated) for credit and debit card


Card brand – The bankcard’s brand can impact interchange

qualification criteria. This usually occurs with credit cards that

carry a cardholder reward such as airline miles and so on.

Card owner – To whom or what entity a card is issued – to a

business, individual, governmental agency or corporation – also

influences interchange qualification.

Action – How much you can optimize the interchange rates for your business depends on many variables. Get a free, no obligation analysis and comparison of processing rates for your business by contacting Sales Sense Payments at 585-704-6453 today.

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