NPPSI Learning Center
What is Interchange and how does it effect me and my business?
Interchange
Interchange Fees are the fees that the Card Associations charge for processing a transaction. There are a variety of different Interchange Fees based on how the transaction is sent and the type of Merchant Account. Retail vs Mail Order/Telephone Order (MOTO)
It is usually stated as a percentage of the total bill, plus a flat per transaction rate. This fee covers the costs and time associated with getting funds to the Merchant Bank and getting the billing information to the Issuing Bank.
The fee is paid by the Merchant Bank to the Issuing Bank, who then pays the Card Association.
Discount Rate
The Discount Rate is the fee paid by a Merchant to the Merchant Service Provider to handle the deposit of credit card funds into their Merchant Bank account. It is negotiated at the time that the Merchant selects their Merchant Services Provider and is usually quoted as a percentage or fractions thereof (basis points).
Example of a transaction and the cost assess to the business
Sale - $100.00
Discount rate (Qualifed) - 1.78%
Transaction fee - $0.25
Sale $100.00 X Discount rate 1.78% + Transaction fee $0.25 = $2.03
This transaction will cost the merchant $2.03
- Interchange
North Pacific Payment Services Inc.
10170 SW Nimbus Ave #H2
Portland, OR. 97223
1-800-545-5612
(503) 639-5577
Fax (503) 684-7073
"Is your credit card company providing you with a statement that you can understand? - We can"
