To simplify the cost for merchants, credit card companies compute interchange into flat rate plus a percentage of the sales total (including taxes). It’s confusing, but it can have a significant impact on your bottom line. While the card associations assess and determine the Visa and Mastercard are the biggest card network companies in the world, so theirs are the interchange fees merchants will face most often. The major distinction between these cards is that they distinguish between recurring payments and one-off payments. For both companies, the interchange will depend largely on the type of card used. Interchange rates are set by the credit card companies and revised periodically. 2% + $0.10).

The average credit card processing fees range from about 1.3% to 3.4%, plus the payment processor's cut, which can vary depending on the processor and … Interchange fees make up a huge percentage of the total costs involved in accepting card payments. The average interchange rate for a credit card payment is around 1.81%, while the typical interchange for debit cards is 0.3%.Whenever a credit card or debit card transaction is processed, funds are transferred from the issuing bank to the acquiring bank, sometimes called the merchant bank. The American Express discount rate is composed of a percentage plus some fixed a fixed transaction fee.The fees charged by American Express are largely dependent on the type of business being serviced. For the service they provide, associations collect a fee from the acquiring bank – this is what's known as the interchange fees. The average interchange rate for a credit card payment is around 1.81%, while the typical interchange for debit cards is 0.3%. Visa & Mastercard Interchange Fees; Discover Interchange Fees Although they are collected by the credit card networks, interchange fees are paid out to the bank that issued the card. Though different in name, these are the same functionally. If your business charges a recurring monthly fee to a customer, you will generally pay a lower interchange fee than you would for an equivalent one off.As of 2016, Discover cards accounted for approximately 8.1% of all cards in circulations.American Express doesn’t charge interchange fees, and instead imposes a discount rate. Note that in certain instances, like with retail and restaurant transactions, your discount rate will be 0.30 points higher if it is keyed in and not swiped.Traditionally, American Express has more premium credit cards in their portfolio leading to higher interchange fees. This is unlike Discover, Visa and Mastercard, all of whom have other qualifying factors impacting their interchange fees, such as whether a card is considered premium or not. Typically, the interchange fee is comprised of a percentage of the total transaction plus some fixed amount (e.g. Last Update: Data for years prior to 2013 reflect a split between covered/exempt issuers, rather than covered/exempt transactions. in Political Science.Advertiser Disclosure: Some of the offers that appear on this website are from companies which ValuePenguin receives compensation. He previously covered mortgages, banking and insurance for the website. As mentioned above, debit cards have significantly lower interchange rates than credit card ones. These fees vary depending on the type of transaction, your location, and business model (to name but a few).

Transactions made using certain reloadable general-use prepaid cards and debit cards issued pursuant to government-administered payment programs are exempt from the interchange fee standard, even if the card is issued by a covered issuer.As used below, "covered transactions" are transactions made using debit cards issued by covered issuers, excluding transactions made using prepaid or government program cards that are exempt from the interchange fee standard. July 18, 2019