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Merchant Credit Card Processing Fees – After each credit or debit card transaction, businesses must pay a delivery fee, also known as a delivery fee or exchange rate. Many variables can affect the amount of the payment, and it can be difficult to determine the cost.
In this article, we’ll walk you through the factors that affect exchange fees, where you’ll find the most up-to-date exchange rates and regulations that apply so you’re paying a fair price.
Merchant Credit Card Processing Fees
Every time a payment is made via a card system (Visa, Mastercard, etc.), the recipient pays the cardholder’s bank a commission. The company then returns the commission as part of the card processing costs.
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On average, delivery fees are around 0.3-0.4% of the transaction amount in Europe and 2% in the US.
Card systems set delivery fees that are non-negotiable. They are also regularly regulated. For example, Visa and Mastercard announce new prices every year in April and October.
The most accurate and up-to-date way to find out the current prices is to check the card system’s website. Below you can find Visa and Mastercard prices in different regions:
Some card networks, such as American Express and Discover, operate a little differently than Visa and Mastercard, and do not display their rates online.
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Many factors affect the exchange rate. Here are the most important things you need to know and how they affect the amount you’ll be charged:
Different card systems charge different exchange rates. Therefore, the price for a user paying with a Visa card is not the same as with a Mastercard.
Card-present (CP) transactions, also known as face-to-face transactions, have lower delivery fees than card-not-present (CNP) transactions. This is because the risk of fraud is lower when the customer’s card is physically present.
Credit and debit cards have higher delivery costs than current debit and prepaid cards because the level of risk is considered higher.
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The My customer center you specify can affect your exchange fees. For example, in the United States and Australia, Visa and Mastercard grant lower rates to businesses such as charities, travel agencies, streaming services, and non-profit organizations.
Domestic transactions, where the issuing bank is in the same country as the company, are usually cheaper than cross-border transactions.
If the customer uses a reward card to pay, the shipping costs are usually higher. This is because the increased fees are paid for the additional features offered by the rewards programs.
Some of the above factors you can influence, but others you cannot change. For example, if you convince your customers to buy more in store than online, you can lower your switching costs.
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However, you cannot influence your own customer center. Your own customer center is assigned to you and depends on the type of work you do.
Lowering exchange fees does not necessarily lead to higher profits. By limiting your customers’ choices, you may turn them away from buying from your company.
Interchange++ (or Interchange Plus Plus) and Blended are the most commonly used pricing models for card transactions. The main difference between them is transparency.
Interchange++ shows a detailed overview of the three previously mentioned payment card costs: recipient margin, card scheme fee and delivery fee.
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You only pay the commission that your card issuer actually charged you. Because delivery fees vary based on a number of factors, they can sometimes be lower than the flat rate.
An alternative to Interchange++ is a bundled price. The Blended model charges average processing costs plus a fixed margin. You will be charged the same margin for each transaction and you will not see a cost breakdown.
This makes it easy to understand but opaque. And there’s no guarantee that the processor will share the savings from lower shipping fees with you.
Traditionally, there has been very little transparency in the calculation of delivery fees. Large companies with high transaction volume were able to negotiate lower fees, while small companies had to pay the full amount.
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Markets dominated by major international card schemes were the most vulnerable. Companies could not afford to abandon payment methods that most of their customers used.
Fortunately, there have been recent advances in the standardization of interchange fees with stricter rules and payment limits, and overall transparency has increased.
Note: US credit is unregulated and US lending only applies to regulated banks. Payment restrictions only apply to US and EEA consumer cards. In Mexico, the limits depend on the industry, and some prices are negotiable.
This change approved in 2010 is an example of a payment limit for debit and prepaid card transactions.
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Durbin’s change depends on the size of the issuing bank’s assets. If the issuing bank has at least $10 billion in assets, its debit and prepaid cards will be charged at regulated interest rates. These cards incur a 0.05% + $0.21 or 0.05% + $0.22 Interchange Fee, depending on the fraud prevention policy.
The European Economic Area (EEA) introduced regulation of delivery fees in 2015. This led to strict regulation of transfer fees and made the EEA one of the cheapest options in the world.
Delivery fees for consumer cards are limited in all EEA regions, so it’s a good place to set up an entity for cross-border transactions. The exact caps are as follows:
By submitting this form, you confirm that you have read the terms of our privacy statement and accept the use of the data in accordance with them. Visa is one of the most widely accepted credit cards in the world. Cardholders consider Visa a safe and reliable payment method.
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Like all major card networks, Visa charges a delivery fee for every transaction paid with a Visa card. These fees vary based on a number of circumstances such as card type, merchant class code, data level, and more.
Unlike Discover, Visa is very open about its shipping fees and posts prices online. In fact, a full list of all Visa shipping fees can be found here.
Despite this, this resource can be difficult to understand. It is 23 pages long and consists of dozens of different charts.
To make it easier for you to understand, I’ve created this guide as a quick resource to cover the most common Visa interchange fees.
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Visa has introduced new exchange rates and program changes from October 1, 2022. Let’s take a closer look at these updates below:
The Visa B2B virtual payment program is built for wholesale travel purchases. Here’s a look at the new program IDs and prices:
In addition to the above updates, Visa is launching a new flexible B2B product globally (except Canada). All Omat customer centers are eligible for the program, and they are made with Visa’s new virtual card product.
Visa has launched a new major ticket exchange program that is strictly for Canada. The exchange rates below apply to corporate cards, purchase cards, fleet cards and virtual B2B cards:
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The first price applies to transactions between $100,000 and $249,999.99 CAD, and the second price applies to all transactions of $250,000 CAD or more.
The Visa Flexible Prepaid Card with Consumer Credentials card is issued to customers in the Asia Pacific and Central and Mediterranean regions. But the cards can be accepted worldwide.
All sales and refunds on the new flex card are eligible for Visa’s current cross-regional exchange rates, as well as the new Asia-Pacific and CEMEA rates:
Visa has announced major changes from April 22, 2022. Here’s a closer look at what you can expect in the future.
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Visa charges a $1 fee per declined transaction to merchants who submit repeated transaction authorization requests if three previous attempts for the same recurring transaction have been declined.
They also estimate a $0.02 per item fee for each merchant in a detailed system integrity billing report.
Visa has announced major changes that will take effect on April 22, 2022. Here’s a closer look at what you can expect in the future.
From April 22, 2022, transactions with cardholder information are no longer eligible for the key exchange program. They meet other exchange rates based on criteria for eligible transactions.
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To make this guide easier to read, I’ve divided the common exchange fees into different categories. You can easily search, scan and find what you are looking for below.
Note: The rates below are based on the latest Visa Interchange rates published on October 15, 2021. Last updated by the MCC team on January 25, 2022 to reflect current Visa Interchange rates.
Before we dive into general payments, it’s important to understand how Visa classifies certain transactions. Visa segments some merchants into threshold categories based on 12 months of activity.
The minimum amount and quantity of your transaction may affect your exchange rate. These are the thresholds for retailers and supermarkets:
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Threshold values are clearly marked in the delivery fee tables. If you don’t fall into one of these categories, you can use other rates to determine your benefits.
Let’s take a closer look at some industry-specific Visa credit card categories. (Prices and screenshots courtesy of Chase Payment Solutions and Visa USA Interchange Refund Fees)
There are other exchange rates specifically for US transactions. They are divided into credit and debit categories.
Charge transactions are further divided into two additional categories – exempt business charges and regulated Visa charges. Payment schedule
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