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What is a Credit Card Interchange Rate?

Last updated 6 years ago

For at least as long as there has been currency, people have paid for goods and services using credit. However, in the high-powered business world of today, using credit has become complicated and expensive. To help you achieve a better understanding of the way credit card companies do business, here’s a brief overview of interchange rates.

  • Interchange Rate Basics

Since credit card transactions cost money to process, banks charge businesses a small percentage of every purchase made with a credit card. This fee, sometimes called an interchange rate, often amounts to 1% or more of every transaction. Though this may not seem like a lot, it can add up to thousands of dollars per year.

  • Controversy

Though banks claim that high interchange rates are essential for covering the expenses of processing credit card transactions, many people find that hard to believe. Seeing how technology has streamlined credit card usage, interchange rates and other processing fees should be going down, not up. Considering thesoaring profits of the world’s leading banks, many businesses are getting understandably flustered at these unjust fees.  

  • Fighting High Interchange Rates

Though a particular bank might try to get you to pay a high interchange rate, you shouldn’t accept the fee as inevitable. A merchant services firm like Merchant Advocate can take a close look at your bank’s proposed interchange rate, determine what the interchange rate should be, help you to negotiate for a more manageable rate, and ultimately save you money.

If you suspect that your bank is taking too much for itself, contact Merchant Advocate today. We’re dedicated to bringing down unfair processing fees wherever they exist. Call us today at (732) 727-2073 and take one step closer to higher profits.  


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