07/06/2018
I've received quite a few emails from business owners that downloaded my guide regarding "Interchange."
In the credit card processing world, "Interchange" is, basically, the wholesale cost to you to accept credit cards in your business.
It is the non-negotiable portion of your processing fees and SHOULD be the largest portion of what you pay (if you've got a good processing deal).
What makes up the Interchange?
Two things...
1) Fees from the issuing banks (the banks that issued the cards your customers are using).
2) Fees from the card brands (MasterCard, Visa, Discover, American Express).
Interestingly, the fees that go to the card brands are actually a fairly small percentage of your total fees. The VAST majority of the fees you pay go to the issuing banks.
TIP TO ELIMINATE CONFUSION: One of my biggest tips for quickly understanding how to best negotiate processing fees is to understand that it's not necessary to understand the HUNDREDS of different types of card fees and rates that all add up to your Interchange cost - because you have no control over them and can't negotiate them anyways. It's only important that you have a good handle on what YOUR specific Interchange average is. Once you know YOUR average interchange average - you can easily negotiate an "Interchange Plus" arrangement with a processor.
As usual, if you have any questions about this stuff or would like someone to calculate YOUR average Interchange rate for you - feel free to contact me at [email protected] or call me at 412-329-8264.
Regards
Bob
P.S. If you'd like help determining YOUR average Interchange rate - contact me.
