Tips and Tricks for Reducing Interchange Cost
Interchange is unavoidable when accepting credit cards; the amount you pay in interchange fees can definitely vary however!
Interchange is the percentage by volume fee that gets assessed to every credit card transaction. Some transactions come in at a higher interchange rate, while some come in at a lower percentage rate.
Similar to the risk level of a merchant, the interchange rate that gets assessed to the transaction fluctuates based on how likely the charge is to overturn. There is a base level of interchange assessed to the merchant at time of underwriting, similar to qualifying for a percentage rate on a loan.
The interchange rate will also fluctuate depending on what type of card your customer is paying with. Different credit cards have different base interchange rates before the cost of the merchant gets factored in. Each credit card network, like VISA and Mastercard have their own interchange distribution charts that can be found online.
The best way to lower these fees is to collect more information on your customer in the form of Level 2 and Level 3 qualification data. Obtaining this type of information with your credit card transactions grants the networks some reassurance that the transaction is legitimate and will be paid, because it is tied to a specific individual or company. This type of information includes: Mailing address, Email, and Phone number of the customer.
