Interchange Rates

Interchange fees are fees paid by a merchant's acquiring bank to a card-issuing bank for processing a payment transaction. These fees are typically a percentage of the transaction value and are set by the card networks (e.g., Visa, Mastercard, etc.). The fees are intended to compensate the card-issuing bank for the risk and cost of processing the transaction and maintaining the payment network infrastructure.

Several factors impact the interchange fees that merchants pay, including:

1. Transaction type: Different types of transactions, such as online transactions or contactless payments, may incur different interchange fees.
2. Card type: The type of card used for the transaction (e.g., debit or credit) can also impact the interchange fee.
3. Merchant category: Merchants are typically categorized based on the type of goods or services they offer. Different categories may have different interchange fees.
4. Transaction value: Interchange fees are typically a percentage of the transaction value, so the higher the transaction value, the higher the interchange fee.
5. Risk: The level of risk associated with the transaction can also impact the interchange fee. For example, a transaction with a high risk of fraud or chargeback may incur a higher interchange fee.

Level 2 and 3 Interchange

Level 2 and Level 3 Interchange are special rates that credit card companies offer to businesses for specific types of transactions, typically in a business-to-business (B2B) environment. These rates are lower than the standard interchange rates and can result in significant savings for businesses.

To qualify for Level 2 or Level 3 Interchange, businesses need to provide additional transaction data beyond what is typically required for a standard credit card transaction. FlexPoint provides this data on your behalf! Level 2 Interchange is typically available for corporate and purchasing cards, while Level 3 Interchange is available for commercial and government cards.