Member Benefits

Interchange updates & credit card processing fees

Submitted by First Horizon Merchant Services

Interchange is a component part of the fees paid for a credit card transaction. It is specifically collected by card issuing banks from you, the merchant, for each credit card transaction. It is the biggest portion of the fee that you pay.

The card associations (VISA & MasterCard) and the issuers charge interchange to cover the costs associated with the card payment networks and the communication of data that goes into a payment authorization, particularly fraud risks and float of funds.

Every credit card processor/acquirer is assessed the same interchange fee structure from VISA & MasterCard and is required to pass any increases or decreases along to the merchant.

In April of 2007 VISA and MasterCard increased the number of interchange rates in their commercial card programs. This offers merchants greater flexibility for transactions that may not currently qualify for.

Your interchange qualifications have a significant effect on how much in fees you pay and therefore affects your profits.

The following is a list of the highlights changes:
• VISA announces new commercial card interchange programs.
• VISA introduces the new Signature Preferred card in the U.S. market.
• VISA adds four new MCC (Standard Industry codes) codes to the CPS Retail 2 interchange program.
• VISA eliminates amount tolerance check on CPS Retail debit transactions from merchants in four MCC codes.
• MasterCard announces a new petroleum interchange program.
• MasterCard introduces new commercial card programs for large ticket transactions.

Under the rules and regulations of VISA & MasterCard, every credit card processor and acquirer is mandated to notify each of their merchants of the changes in writing within 30 days of implementing the changes (passing through the new interchange fees to you). Watch your merchant statements for these very important messages.

Call First Horizon Merchant Services to find out what you can do to qualify your transactions for the best possible rates at 1-866-894-8600.

Reprinted from Central Vac Professional, May 2007