Is It Possible to Lower Interchange Fees?

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Payment processing is a very important topic for businesses of all sizes. Not only do you want to work with a reliable processing company, but you also want to ensure you’re paying a fair rate for this service. Because processing rates impact every credit and debit card sale that your business makes, even seemingly small differences between rates can have a direct impact on your bottom line.

While there are some great payment processing partners, there are also some that are only interested in getting as much money as possible out of their customers by misleading them to obscure the true nature of their rates and services. A great starting point for fully understanding payment processing rates and what’s considered fair is to look at interchange fees.

This fee is established by card brands and refers to the money that’s transferred from the acquiring bank to the issuing bank for each bankcard transaction. Where things get a little tricky is these fees can differ based on the specific category of a transaction. Interchange qualification (which is the term used for categorizing transactions) factors include whether or not a card is present, the card’s brand, how much transactional data is supplied and the inclusion of a merchant category code.

The Best Way to Optimize Interchange Fees

Because interchange fees are a complex topic, you need the right strategy to optimize them for your business. The core of this strategy is to ensure that you’re able to provide as much high quality data as possible for your transactions. When transactions are missing data or have an issue like an authorization that was never settled and has not been reversed, you’re going to end up paying higher fees. Since these higher fees will include all applicable transactions, it can start adding up very quickly.

Choose a Great Processor with Lots of Features

We know – dealing with fees can start to feel like you’re facing an uphill battle that includes a lot of technical complexities. While optimizing interchange fees does require work, it doesn’t have to be an overwhelming task.

The key is working with a processor that will provide the features you need to do things like capture and transmit L2 & L3 data on a real-time basis and utilize a rules-based engine to put data into the right fee bucket on every transaction. If your current processor doesn’t offer the features needed to make those optimizations, we encourage you to take a look at our list of the top processing companies.

Posted on Friday, July 7th, 2017