Electronic Merchant Systems (EMS), a company based in Cleveland, Ohio, published a blog post that provides a guide to interchange fees for debit and credit card payment transactions. Interchange fees are called “interchange redemption fees” by Visa and other credit card networks. This is the wholesale rate or fee that is controlled and charged by the type of card used, such as Mastercard or Visa, for settling and authorizing a credit card transaction. These fees are paid to the card issuing bank to cover processing fees, bad debt costs, fraud and payment approval risk.
Bill Felberg, vice president of sales at EMS, says, “Interchange fees cannot be negotiated, but you can try to lower your interchange transaction fees. Transactions are eligible for different categories of exchange based on various factors. You will not negotiate lower rates on a particular exchange category. Instead, you adjust the way you process credit or debit card transactions to qualify for a lower cost category. This applies to setting “downgrades” (or categories of penalties) so that you no longer have costly penalties. Or you meet the criteria for a better exchange category even if you were not initially penalized.
Interchange fees are a significant percentage of a business’s credit card processing costs, whether it’s a business credit card, commercial card, government card, or business credit card. a consumer card. So it makes sense to aim for trade optimization, that is, the process of adjusting the company’s handling behavior in order to achieve the lowest possible interchange fees.
Interchange allows card issuers and processors to exchange bank card transaction data and other card details and funds using a standardized basis. Most interchange fees are calculated as a percentage of the sale price plus a flat fee. Factors that can affect interchange fees are: brand of card, type of business, type of card, cardholder, and type of transaction. Each brand of card will charge its own interchange fees. The type of business will also affect interchange fees, with conventional retailers enjoying the lowest rates while direct marketers, online merchants, and B2B merchants have to pay higher fees. The type of card will also affect these fees. For example, processing a secure debit card with a PIN code will result in lower interchange fees because there is less risk of fraud. Credit cards with points or cash back programs, airline miles, or other types of rewards have higher fees because these benefits have to be paid for.
While interchange fees cannot be negotiated, businesses can try to lower their interchange transaction fees. Transactions can be classified into various exchange categories based on a number of factors. Instead of negotiating lower rates on a specific interchange category, the company’s strategy would be to adjust the way it processes debit or credit card transactions in order to qualify for a category with fees. interchange inferior. One way to do this is to set “demotions” or categories of penalties to eliminate onerous penalties. Or the business may aim to meet the requirements of a better trade class even though the business was not initially penalized.
Starting in 1988, Electronic Merchant Systems is a national payment processing and merchant services company with over 30 years of experience in the payments industry. Their mission is to help local businesses meet their payment processing needs and secure different types of electronic payment process including stored value cards, EBTs, all credit cards, major cards debit and electronic check services. They still offer 24/7 customer support. Currently, they have already provided assistance to tens of thousands of retail, internet, and start-up businesses in various locations across the United States. Approximately 95 percent of EMS customers have been able to benefit from substantial savings through a tariff revision. EMS has 11 regional sales offices in different parts of the United States. Over 100 cities in the United States have an EMS presence.
Those interested in learning more about interchange fees can visit the Electronic Merchant Systems website at https://www.emscorporate.com/news/interchange-fees, or contact them by phone or by E-mail.
For more information on Electronic Merchant Systems, contact the company here:
Electronic Merchant Systems
250 W Huron Road # 400
Cleveland, OH 44113