Track 02
Promise: you will understand what interchange is, who sets it, who receives it, and how to price any offer against it — using the published rates the brands themselves post.
Every time a customer pays by card, the sale splits three ways. The largest piece — usually 70 to 90 cents of every fee dollar — is interchange: a fee set by the card brands (Visa, Mastercard) and paid to the bank that issued your customer's card. A second, much smaller piece is the brands' own assessment (Visa's network assessment is roughly 0.14% of volume). Whatever is left is your processor's processing fee — the only part your processor controls, and the only part you can actually negotiate.
Interchange is not a mystery price invented by your processor. Visa and Mastercard publish their interchange tables — hundreds of rates organized by card type, industry, and how the transaction was taken. The rates update on the brands' schedule, typically twice a year. Any processor who tells you interchange is "proprietary" or cannot be shown to you is telling you they do not want you doing the math in this lesson.
Here is a working set of published Visa interchange rates. These are the wholesale costs underneath every processor's pricing — including ours.
Published Visa interchange (examples)
| CPS Retail — basic consumer credit, swiped/chipped in store | 1.51% + $0.10 |
| Rewards Traditional — standard rewards credit card | 1.65% + $0.10 |
| Signature Preferred / Infinite — premium rewards credit | 2.10% + $0.10 |
| Keyed CPS Retail — same basic card, number typed in | 1.90% + $0.10 |
| Consumer debit, swipe/chip (non-regulated issuer) | 0.80% + $0.15 |
| Regulated debit (issuing bank over $10B in assets, Durbin cap) | 0.05% + $0.22 |
Read the pattern: rewards cost more than basic cards, keyed costs more than swiped, and regulated debit costs a fraction of credit. That pattern — not your processor's mood — is why your bill looks the way it does.
Three forces move a transaction between rates. The card itself: a premium travel-rewards card carries higher interchange because the issuing bank funds the points partly from it. How it was taken: a chip read proves the card was present; a keyed number does not, so keyed transactions price higher (Track 04 digs into this). Your data quality: transactions settled late, or without the data the brand expects for your industry, can be pushed to more expensive categories — one reason batching on time matters (Track 06).
Worked example — a $100 in-store sale
Your customer pays $100 with a basic Visa credit card, chip read at the counter. Published interchange for that card: 1.51% + $0.10. Add Visa's assessment of about 0.14%, and the wholesale cost of the transaction is set before your processor earns a cent. On interchange-plus pricing with our published EBS processing fee of +0.50%:
| Interchange (1.51% of $100, plus $0.10) | $1.61 |
| Assessment (~0.14%) | $0.14 |
| EBS processing fee (+0.50%) | $0.50 |
| Total cost of the transaction | $2.25 |
Now swap in a premium rewards card at 2.10% + $0.10 and the same sale costs $2.84 — same store, same terminal, same processing fee. The $0.59 difference is interchange, and it would exist on any honest plan. On tiered or flat pricing, that difference is where margin hides: you are quoted one rate and quietly billed whatever the bucket rules produce.
The teaser rate. Quoting the cheapest interchange category ("rates as low as 1.51%!") as if it were your price. That number is a pass-through cost, not an offer — your processing fee is what you are actually buying.
The flat blend. One percentage on everything. It feels simple until you realize your regulated debit volume — wholesale cost 0.05% + $0.22 — is being billed at the same blended rate as premium credit. Debit-heavy businesses subsidize the blend.
The invisible downgrade. On tiered plans, transactions "downgrade" to pricier tiers for reasons buried in the plan's rules: a keyed entry, a late batch, a rewards card. The downgrade is real interchange behavior; the game is hiding how much of the increase is interchange and how much is processing fee.
The processing fee that won't sit still. If your effective rate (Track 01) climbs month over month while your volume and card mix stay steady, and interchange did not change, the processing fee moved. Ask why — in writing.
It is not complicated: interchange and assessments at cost, a processing fee stated as a number you can multiply, and account fees stated as dollars you can add. Our published pricing is exactly that — interchange + 0.50%, merchant services $35/mo flat, equipment placement $35 one-time — and we publish it because a merchant who can do this lesson's math does not need to take anyone's word for anything.
Five minutes with your statement and this list will tell you whether your pricing is honest.
Published Pricing
Our pricing page shows the whole structure: interchange at cost, + 0.50% processing fee, $35/mo flat merchant services, $35 one-time equipment placement. Compare it line by line against the statement math you just learned.