Interchange Fees Increasing April 2020. The payment processing world is going through some significant changes. Effective April 2020, the interchange fees (also known as swipe fees) for the major card networks will have some adjustments. Visa sent a document that outlined the proposal to banks. MasterCard Emerging Market; Since not all industries accept credit cards, MasterCard tries to incentivize “newer” industries with lower, more advantageous interchange rates. These are called Emerging Market interchange rates, and they apply to debit/prepaid cards only. Interchange rates are set and regulated by the Payment Card Networks and can vary by method of acceptance, the type of business accepting cards (MCC), type of card, whether it is face-to-face, or many other variables. How MCC Affects Merchants. While how MCC affects consumers is relatively simple, for merchants, it gets a little more complicated. MCC can affect a merchant’s interchange rate, now we’ve spoken about interchange briefly when we discussed tiered pricing v. cost plus pricing. However, there are a few factors, some of which are outside the Current US Interchange Rates. The term “Interchange rate” refers to the fees charged by the card companies for use of their cards. These card companies include Visa, Mastercard, AMEX, Discover. Interchange rates change twice a year – in April and October. Payment processing companies make money by putting a markup on top of the
Key-entered Charges are subject to a fee. See subsection 12.2.2, “authorization fees.” If a Merchant accepts Card Present Transactions and also accepts
See how interchange works, and where MasterCard Small Ticket rates fit into Be classified as Fast-Food (MCC 5814), Movie Theater (MCC 7832), A Merchant Category Code (MCC) is a four-digit number listed in ISO 18245 for retail financial to determine the interchange fee paid by the merchant, with riskier lines of business paying higher fees; by credit card companies to offer cash interchange reimbursement fees; merchants pay a "merchant discount fee" to MCC 7251: Shoe Repair Shops, Shoe Shine Parlors, and Hat Cleaning Shops Merchant Category Codes (MCC) For Payment Processing The Complete Guide to Amex Interchange and Processing Fees Unlike Visa and Mastercard, Learn more about the benefits of interchange fees & rates, it delivers to all Available to merchants set up with card acceptor business code (MCC) 8398 that
So how do MCC and SIC codes relate to Interchange? At any given time, the card brands may offer discounted Interchange rates to certain industries. For instance, Visa’s current Interchange guide lists CPS/Utility as receiving a flat Interchange of $0.75. Supermarkets, gas stations and hotels all receive special pricing.
How MCC Affects Merchants. While how MCC affects consumers is relatively simple, for merchants, it gets a little more complicated. MCC can affect a merchant’s interchange rate, now we’ve spoken about interchange briefly when we discussed tiered pricing v. cost plus pricing. However, there are a few factors, some of which are outside the Current US Interchange Rates. The term “Interchange rate” refers to the fees charged by the card companies for use of their cards. These card companies include Visa, Mastercard, AMEX, Discover. Interchange rates change twice a year – in April and October. Payment processing companies make money by putting a markup on top of the Interchange rates are set and regulated by the card brands and passed through to you by Moneris. 7. If the interchange rates for Visa and Mastercard are decreasing, can Moneris apply the new rates for me now? No, Moneris does not set interchange rates. Interchange rates are set and regulated by the card brands and passed through to you by Moneris. Data Rate 3 will get a better rate with CLT if the amount is greater than $7272.72 : DATA RATE 2 : CARD TYPE: INTERCHANGE RATE: QUALIFICATION REQUIREMENTS (LEVEL 2 DATA MUST BE PRESENT) Commercial Card: 2.10% + $0.10 * Not available to vehicle rental (MCC code - 3351-3500, 7512, 7513, 7519), World Business: 2.37% + $0.10 interchange rates and fees Regulated interchange rates and fees Regulated interchange rates and fees with fraud adjustment Switch fee Accel Accel Special Exempt All Other Merchant Types - Group 1 & Group 2 Accel Special Exempt 0.90% + $0.225 N/A N/A $0.10 All Other Merchant Types - Group 3 Accel Special Exempt 1.10% + $0.115 N/A N/A $0.10 Flexible interchange rates make it possible for electronic payments to deliver maximum value at the lowest cost for both merchants and consumers. Interchange also promotes credit availability for small businesses and is a key driver for financial inclusion when set at the optimal level.
