Save on Credit Card Processing With Payment Depot

Keep up to date with the current
interchange rates for Visa and MasterCard

Interchange is the fee collected by the customer’s credit card issuing bank on every transaction. These rates are set by Visa and Mastercard every year and apply to ALL processors. In other words, this is the true cost that the processor has to pay on every transaction.

Card-TypeInterchange Rate
Interchange Rate
Mastercard Retail – Debit0.05% + 22¢0.05% + 22¢
Mastercard Retail – Credit Core1.58% + 10¢1.89% + 10¢
Mastercard Retail – Credit Rewards Enhanced1.73% + 10¢2.04% + 10¢
Mastercard Restaurant – Debit0.05% + 22¢
Mastercard Restaurant – Credit1.73% + 10¢
Mastercard Credit Retail World1.77% + 10¢2.05% + 10¢
Mastercard Credit Retail World Elite2.20% + 10¢2.5% + 10¢

Card-TypeInterchange Rate
Interchange Rate
Visa Retail – Debit0.80% + 15¢1.65% + 15¢
Visa Retail – Credit1.51% + 10¢2.10% + 10¢
Visa Retail – Credit Rewards Traditional1.65% + 10¢1.95% + 10¢
Visa Restaurant CPS – Debit1.19% + 10¢1.65% + 15¢
Visa Restaurant CPS – Credit1.54% + 10¢1.80% + 10¢
Visa Credit Restaurant Rewards Traditional1.95% + 10¢
Visa Credit Retail Corporate Commercial2.50% + 10¢2.70% + 10¢
Visa Business – Debit1.70% + 10¢2.45% + 10¢
Visa Business – Credit2.150 + 10¢2.650% + 10¢
*Above are the most common interchange qualifications. For a complete list of US interchange rates, please visit the Visa and MasterCard websites below:
Visa Regulation Fees
Mastercard Interchange
**Merchants are impacted by these MasterCard Integrity Fees when authorizations are not cleared or reversed within 30 days of pre-authorizations or 7 days of final sale.

Understanding Interchange Rates and What They Mean for Your Business

As a business owner, navigating the complex world of credit card processing can be daunting. One term that often comes up is “interchange rates.” These rates are set by credit card companies and are essential for covering the costs of providing cards and processing transactions. These rates are a fundamental part of the fees merchants pay to accept credit and debit card payments. Understanding interchange rates can help you make informed decisions, negotiate better rates, and ultimately save money on processing costs. In this comprehensive guide, we’ll break down what interchange rates are, how they work, and what factors influence them.

What Are Interchange Rates?

Credit card interchange fees are fees paid by a merchant’s bank (acquiring bank) to the cardholder’s bank (issuing bank) every time a credit or debit card transaction occurs. These fees compensate the issuing bank for the risks and costs associated with facilitating card payments. Interchange rates are a significant component of the overall merchant discount rate, which also includes other fees charged by payment processors and card networks like Visa and Mastercard.

How Do Interchange Rates Work?

When a customer makes a purchase using a credit or debit card, the credit card transaction process involves several steps:

  1. Authorization: The merchant’s point-of-sale (POS) system or online payment gateway sends the transaction details to the acquiring bank.
  2. Routing: The acquiring bank forwards the transaction information to the card network (e.g., Visa, Mastercard), which routes it to the issuing bank.
  3. Approval: The issuing bank checks the cardholder’s account for sufficient funds or credit and either approves or declines the transaction.
  4. Settlement: If approved, the transaction is processed, and funds are transferred from the issuing bank to the acquiring bank, minus the interchange fee.

The interchange fee is deducted from the total transaction amount before the merchant receives the payment. For example, if the interchange fee is 2% on a $100 transaction, the merchant will receive $98.

Factors Influencing Credit Card Interchange Fees

Several factors determine the interchange rates for a given transaction:

  1. Card Type: Different types of cards (e.g., debit, credit, rewards, corporate) have different interchange rates. Generally, credit cards have higher interchange rates than debit cards, and premium or rewards cards have higher rates than basic cards. The average interchange fee varies by card type and can range from 1% to 3% of the transaction amount.
  2. Transaction Method: The way a transaction is processed affects the interchange rate. Card-present transactions (in-store purchases) usually have lower rates than card-not-present transactions (online or over-the-phone purchases) due to the higher risk of fraud associated with the latter. Certain industries or transaction types may incur higher interchange fees due to increased risk.
  3. Merchant Category Code (MCC): Each merchant is assigned a category code based on their business type. Some industries, such as grocery stores or gas stations, have lower interchange rates due to lower fraud risk and high transaction volume.
  4. Transaction Size: Interchange fees can be a flat fee, a percentage of the transaction amount, or a combination of both. Smaller transactions might incur a higher percentage rate compared to larger transactions.
  5. Processing Technology: Using secure payment technologies, such as EMV chip cards or tokenization, can lower interchange rates by reducing the risk of fraud.

Common Interchange Rates

Interchange rates vary by card network and can change periodically. Here are some examples of common interchange rates as of 2024:

  • Visa:
  • Debit: 0.80% + $0.15 per transaction
  • Credit (Standard): 1.51% + $0.10 per transaction
  • Credit (Rewards): 1.95% + $0.10 per transaction
  • Mastercard:
  • Debit: 0.90% + $0.15 per transaction
  • Credit (Standard): 1.58% + $0.10 per transaction
  • Credit (World Elite): 2.10% + $0.10 per transaction
  • American Express:
  • Credit (Standard): 2.50% per transaction
  • Credit (Premium): 3.00% per transaction

Debit card interchange fees are generally lower than credit card fees due to lower risks for card issuers.

These rates are just examples and can vary based on the factors mentioned earlier. It’s essential to consult the latest rate schedules from the card networks or your payment processor.

Reducing Interchange Fees and Costs

Although interchange rates are largely non-negotiable, there are strategies to minimize their impact on your business:

  1. Optimize Transaction Methods: Encourage card-present transactions whenever possible. Ensure your POS system supports EMV chip cards and contactless payments, which are more secure and often come with lower rates. Adopting secure payment technologies can help businesses qualify for lower interchange fees.
  2. Verify MCC: Ensure your business is correctly classified with the appropriate MCC. Some processors might misclassify your business, leading to higher interchange rates. Verify and correct your MCC if necessary.
  3. Reduce Risk of Fraud: Implement robust fraud prevention measures such as Address Verification Service (AVS) and Card Verification Value (CVV) checks for card-not-present transactions. Lowering your fraud risk can lead to lower interchange rates.
  4. Negotiate with Processors: While interchange rates are set by the card networks, you can negotiate other components of your merchant discount rate with your payment processor. Shop around for the best rates and consider processors that offer interchange-plus pricing, which provides more transparency.
  5. Consider Flat-Rate Pricing: For small businesses with low transaction volumes, flat-rate pricing models offered by some processors can be cost-effective. These models charge a single rate for all transactions, simplifying fee structures and potentially saving money on high-interchange transactions. Regularly reviewing processing statements and negotiating with payment processors are effective strategies for reducing interchange fees.

Interchange Plus vs. Flat Rate Pricing: Role of Payment Processors

When selecting a payment processor, you’ll encounter different pricing models for payment processing fees. The two most common are interchange-plus pricing and flat-rate pricing:

  1. Interchange-Plus Pricing: This model separates the interchange fees and processor’s markup. For example, if the interchange fee is 1.8% + $0.10 and the processor’s markup is 0.3% + $0.10, the total cost for a $100 transaction would be $2.20 ($1.80 + $0.10 + $0.30). This model provides transparency, allowing you to see exactly what you’re paying in interchange fees and processor markups.
  2. Flat-Rate Pricing: In this model, the processor charges a single rate for all transactions, regardless of the underlying interchange rates. For example, a processor might charge 2.9% + $0.30 per transaction. While this model simplifies billing, it can be more expensive for merchants with a high volume of low-interchange transactions.
Interchange Rates Calculation

How Interchange Rates Affect Different Businesses and Credit Card Transactions

Interchange rates impact businesses differently based on their industry, transaction volume, and payment methods. Here are a few examples:

  1. Retail Stores: Retailers with a high volume of card-present credit card transactions benefit from lower interchange rates. Implementing secure payment technologies and encouraging debit card use can further reduce costs.
  2. E-commerce: Online businesses face higher interchange rates due to card-not-present transactions. Implementing robust fraud prevention measures and optimizing checkout processes can help mitigate some of these costs.
  3. Restaurants: Restaurants often deal with small to medium-sized transactions and tipping. Ensuring that your POS system properly handles pre-authorization and final settlement of tipped amounts can prevent unnecessary interchange fees.
  4. Service Providers: Service-based businesses, such as consultants or freelancers, may have fewer but higher-value transactions. Interchange-plus pricing can be advantageous in these cases, providing transparency and potential savings on larger transactions.


Understanding interchange rates is crucial for any business that accepts card payments. While these fees are an inevitable part of credit and debit card processing, being knowledgeable about how they work and what factors influence them can help you manage and reduce your costs effectively. By optimizing transaction methods, verifying your MCC, reducing fraud risk, and choosing the right pricing model, you can make informed decisions that benefit your bottom line.

At Payment Depot, we are committed to helping businesses navigate the complexities of payment processing. Our transparent pricing models and dedication to customer service can save you money on interchange fees and other processing costs. Contact us today to learn more about how we can help your business thrive in the competitive marketplace.