Understanding Visa Interchange Rates and Visa Secure: A Small Business Owner’s Guide

Understanding Visa Interchange Rates and Visa Secure: A Small Business Owner’s Guide

An interchange rate is a fee that your customer’s credit card company –– in this case, Visa –– takes from each transaction. Whether you’re an e-commerce or physical retailer, understanding interchange fees can often be challenging as a small business owner.

It’s even more challenging when you realize that Visa cards charge slightly different interchange rates than other card brands. No two card networks process interchange fees the same way.

Interchange fees (or interchange reimbursement fees) are fees paid by your financial institution to your customer’s card issuer. You’ll need to understand Visa interchange rates, so you don’t have any surprises on your monthly statement.

Here’s everything you need to know about Visa’s interchange rates and fees, with answers to FAQs about the Visa network.

What are Interchange Rates and Fees?

Interchange is applied when providers have a wholesale, i.e. interchange-plus pricing model. It’s the wholesale cost that you’ll end up paying for each transaction. But it doesn’t go to your payment processing company.

Interchange fees are withheld from your (the acquirer’s) bank. Instead, the money that’s withheld goes straight to the cardholder’s (your customer’s) credit card network.

Although transaction fees are determined by the card network –– in this case, Visa –– they ultimately go to the issuing bank. So, it’s the bank where the customer/cardholder got their card that ultimately receives your payment.

Interchange varies depending on whether it’s a debit card or credit card transaction, and whether it’s swiped or keyed in. The merchant category code (MCC) that your business falls under will also impact your total.

Who Sets Interchange Fees and Where Do They Go?

Interchange is one of three credit card processing fees you will come across, along with markup fees (or markups) and assessment fees (or assessments).

Interchange fees are preset by your consumer’s credit card network. What you pay will be determined by the type of card that your customer uses for credit card payments, for example, Visa, Mastercard, Amex, Discover, etc.

Your customer’s card issuers set and receive your interchange fee. So, there’s no way to receive a discount rate on interchange without changing the MCC your business falls under.

The Visa Credit Card Network

Let’s take a look at how the Visa credit card network compares with other card networks. Visa’s interchange rates change regularly, so accepting Visa credit and debit card transactions can add up quickly. Visa and other reigning card networks have merchants in a double bind since the Visa card transactions comprise a big chunk of sales.

Visa’s Custom Payment System is also called CPS. It’s the one exemption to the impossibility of lowering interchange fees. CPS makes it possible for merchants to receive lower interchange processing fees on card transactions. It’s not a business card, but a list of criteria that businesses need to follow to receive lower rates.

But don’t count on the merchant discount from Visa. If any transactions don’t meet the highly specific CPS criteria, you’ll still be charged a higher interchange rate.

Current Visa Interchange Rates

When your customer swipes their Visa card at your POS station, their financial institution will confirm a few different factors. These factors determine what Visa interchange fees you’ll pay for card transactions:

  • Is it a card-present or card-not-present transaction?
  • Is it a personal, prepaid, or business card?
  • Your merchant category code
  • Are you using a Visa debit or a Visa credit card?
  • The transaction amount of your customer’s purchase

Visa and Mastercard recently opted to forego an intended price hike due to the pandemic. In a recent statement, Visa said that they’d hold off on the complex rate change “until the economy recovers.”

Visa Interchange Factors Infographic

Mastercard vs Visa Interchange Rates

Let’s take a look at what different card companies charge for credit card transactions. We recently published a graph of the Visa USA/Mastercard transaction fees that you can see here. 

Visa Business and Mastercard Corporate both charge less for corporate transactions than for consumer purchases. Visa’s rates for certain transactions, such as debit cards, are lower than Mastercard.

However, most businesses will need to accept both forms of payment to avoid turning away customers. Visa offers a wide array of cards catered to different consumer preferences. The Visa Rewards Signature Card, for instance, lets customers earn rewards on experiences like hotel stays, travel, entertainment, and dining.

American Express often ends up charging more for processing fees than Mastercard or Visa. Amex calls their interchange rate a “discount rate” on statements, but it stands for the same thing. However, travelers can benefit from Amex’s security features, so it remains a popular payment method.

Are Visa’s Interchange Rates Changing Any Time Soon?

Here are Visa’s present transaction rates.

What is Visa Secure and Verified by Visa? And Should Merchants Use it?

Any merchant with an e-commerce business will have most definitely heard about Visa Secure or Verified by Visa by now.

Visa Secure is the latest name for Verified by Visa.  It helps to protect customers and merchants from fraud while shopping online. Online purchases go through this extra layer of security, often without you even knowing it. This extra layer of security often works automatically – depending on a customer’s previous purchase history and device information and location. From time to time customers will be asked to confirm their identity with Visa Secure.

This process has been around for almost two decades, so it’s not exactly new. That said, adoption of the technology — at least in the beginning — was slow and many merchants hesitant to add extra steps to their checkout processes. 

Today, however, online security has become a much more prominent part of the conversation. As such, the time for merchants to re-address anti-fraud solutions like Visa Secure is now. 

Learn the ins and out of the Visa Secure, how it works, what benefits it can offer, and how to get set up. 

If you are a business taking payments online, we strongly advise that you take the time to read the information below to learn what it is and decide for yourself whether or not it is worthwhile for your business and your customers. 

What is Verified by Visa?

Visa Secure or Verified by Visa is a mechanism designed by Visa to add an extra layer of security to online transactions in an effort to prevent fraud. Visa’s objective is to give merchants an option to better protect their customer’s security online.  

The solution is referred to as a 3D Secure fraud prevention tool. Why “3”? Because three parties are required to be involved in the authentication process. They include:

  • The merchant
  • The acquiring bank (a consumer’s bank)
  • The card network (Visa)

For merchants already familiar with 3D Secure solutions from other card networks, you may notice that Visa’s 3D Secure advanced anti-fraud platform works in a very similar way. This is because the same principles are implemented in Visa’s solution as they are of the highest standard in the industry for 3DS protocol.

Merchant Benefits Verified By Visa \ Visa Secure Infographic

How Does Verified by Visa Work?

The payment process that most merchants have for their online platforms looks much the same: the customer selects their items, confirm amounts, enters credit card details, and hits confirm. 

Verified by Visa works by implementing an additional level of verification to the above process. More on this below.

Version 1.0 vs. Version 2.0

With version 1.0, when the customer hits “confirm” to go through with their purchase, they are taken to a Verified by Visa page and asked for a passcode, which they would have set up through their bank, to prove that they are the valid cardholder. 

With version 2.0., the authentication mostly happens behind the scenes, or in some instances, the consumer may be given a simple challenge, like filling in a one-time password which was sent to their phone. 

Verified by Visa 3D Secure 1.0

When Version 1.0 first came out, it faced a lot of resistance. It required users to have password authentication to complete any online purchase with Verified by Visa, but consumers had to sign up for their Verified by Visa password before they could use it. Unfortunately, the password set up was problematic; it could not be done on the spot, and with some banks, it took a few hours to go into effect. 

Version 1.0 also used a pop-up window that took customers to another page to fill in their password. This made some consumers fear that they were being tricked and in many cases, the pop-up page did not work effectively on mobile browsers or with users who had blocked pop-up windows.

It is Version 1.0 that has caused many to ask whether Verified by Visa is legit. To make things worse, scammers began sending out emails pretending to be from Verified by Visa, to try and get consumers to enter their credit card details and their password for authentication. There were many signs that these emails were not legit, the major one being that no card company would ever ask for this information via email, but consumers can be unaware of these threats, and some do fall victim.  

Verified by Visa 3D Secure 2.0

In 2017, Visa released Verified by Visa 3D Secure 2.0. This version removed the most significant barrier for consumers, the sign-up process. It also replaced the static passwords by introducing token-based and biometric authentication methods, eliminating the risk of scammers getting their hands on the authentication password. 

By linking mobile apps, chip cards, and other electronic methods of payment, version 2.0 offers a more streamlined user experience for the customer, which is undeniably a big win for the merchant — no more abandoned purchases due to clunky processes. Version 2.0 means that safety and convenience are able to go hand in hand.  

Version 2.0 is also far more mobile-friendly than its predecessor, with mobile authentication that allows for seamless integration across mobile devices and payment platforms. 

Lastly, the improved integration of 2.0 improves the risk-based decisions for payment processors and improves customer recognition with every transaction. It is this that allows Verified by Visa 2.0 to skip the authentication challenge with some customers, enabling this process to instead happen in the background, verifying their identity without requiring additional information from the customer. 

This process is now known as Visa Secure.

Is Visa Secure Safe to Use? 

Yes. Both Visa Secure and Verified by Visa are safe for merchants and consumers alike. If consumers are using version 1.0, they need to be aware of the risks of sharing their password and that scammers are out there, but the system itself is 100% safe, as long as users are careful with their information. Version 2 eliminates this concern. 

What to Consider When Implementing Visa Secure?


Visa Secure is for any business that operates online. Whether it’s entirely online or online and through a brick and mortar store does not matter as Visa Secure is only added to the online purchase process.  

For every merchant, whether you already support version 1.0 or not, Visa recommends supporting both the 1.0 and 2.0 specifications. Supporting both versions means that users can decide which authentication method they prefer. This makes merchants appear more accommodating in the eyes of their customers and reduces the friction from consumers who may have preferred version 1.0. 

Visa Secure Merchant Benefits

The benefits of Visa Secure, as presented are :

  • It adds an extra layer of security for online transactions
  • It increases consumers confidence in the safety of the merchants’ online store
  • It can reduce chargebacks by catching fraudulent transactions before they are authorized
  • It shifts liability for fraudulent transactions from the merchant to the issuer.

When adopting any new technology, there are always going to be some customers that don’t like the process and may abandon their cart. While this is a valid consideration, the process is now a relatively common practice that consumers will get used to it, and the increase in consumer confidence should boost sales to minimize the impact of any drop-off. 

Visa Secure Costs

As a card network that wants to reduce the fraud taking place on their cards, it is in Visa’s interests to offer these solutions to their customers for free. Therefore, most merchants will be able to go straight ahead with implementation without incurring any costs. 

In some cases, there may be fees or charges in the event the merchant needs to purchase and install plugins to enable Visa Secure on the site, but this is the only costs that merchants could come up against. 

Merchants are advised to contact their processor to check whether or not Verified by Visa/Visa Secure enablement is part of their processing services. They will be able to inform on what costs may be needed to set up Visa Secure.

How Do You Register for Visa Secure? 

Merchants with an existing Visa Online account can log on to find the Visa Secure implementation guide for merchants and acquirers, which covers:

  • 3D Secure 2.0 processing flows
  • How to get started, program rules
  • Everything else you need to know about getting set up

Merchants who do not currently have a Visa Online account will need to speak with their acquirer or Visa account executive to get an account and learn about how to register for Visa Secure. 

To implement 3D Secure 2.0, merchants’ 3D Secure Server and issuers’ Access Control Server software needs to support the updated 3D Secure 2.0 specifications. Providers of merchant 3D Secure Server software will, in most cases, manage the initiation of the authentication requests, according to the 3D Secure version (1.0 or 2.0) supported by the issuer.

As a free solution that reduces fraud, protects customers, merchants, and issuers, there is very little reason why merchants should not implement Visa Secure.

Visa Interchange: The Bottom Line

Payment Depot The Costco Of Credit Card Processing

As you can imagine, a lot goes into quantifying Visa interchange. There are limited ways to save on interchange fees, so many retailers resort to surcharging –– or passing the expense onto customers to make back their money.

Partnering with a merchant services provider that uses interchange-plus pricing can help you save money on credit card processing without alienating customers.

There’s no way to eliminate interchange fees. However, Payment Depot charges no hidden fees and offers membership-based wholesale rates to help merchants save more. By working with Payment Depot, you can save more and pass the benefits along to your customers.

Contact our award-winning sales team to learn more about how Payment Depot can help your business save more on credit card processing!

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