Electronic Merchant Systems Provides Interchange Fee Guide in New Blog Post

Electronic Merchant Systems (EMS), a company based in Cleveland, Ohio, has published a blog post that provides a guide to interchange fees for debit and credit card payment transactions. Interchange fees are called “interchange reimbursement 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 the settlement and authorization of a credit card transaction. These fees are paid to the card-issuing bank to take care of handling costs, bad debt costs, fraud, and the risk that comes with approving the payment.

Bill Felberg, VP of Sales at EMS, says, “Interchange fees can't be negotiated, but you can try to lower your interchange transaction fee. Transactions are eligible for different interchange categories depending on various factors. You won't be negotiating lower rates on a particular interchange category. Instead, you're adjusting how you take credit or debit card transactions to qualify for a lower-cost category. This applies to fixing "downgrades" (or penalty categories) so that you no longer have expensive penalties. Or you meet the criteria for a better interchange category even though you weren't initially penalized.”


Interchange fees represent a significant percentage of the credit card processing costs of a business, whether it is a business credit card, commercial card, government card, or consumer card. It, therefore, makes sense to aim for interchange optimization, which is the process of adjusting the business’s processing behavior in order to get 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 computed as a percentage of sales prices plus a flat fee. Factors that can affect interchange fees are: card brand, business type, card type, cardholder, and transaction type. Each card brand will charge their own interchange fees. The type of business will also affect the interchange fees, with conventional retail businesses enjoying the lowest rates while direct marketers, e-commerce merchants and B2B merchants need to pay higher fees. The card type will also affect these fees. For instance, processing a debit card secured with a PIN will have lower interchange fees because there is less risk of fraud. Credit cards with points or cashback programs, airline miles or other kinds of rewards have higher fees because those perks have to be paid for.

While interchange fees cannot be negotiated, businesses can try to reduce their interchange transaction fee. Transactions can be classified into various interchange categories based on a number of factors. Instead of negotiating for lower rates on a specific interchange category, the strategy of the business would be to adjust how they take debit or credit card transactions in order to qualify for a category with lower interchange fees. One way to do this is by fixing “downgrades” or penalty categories to eliminate expensive penalties. Or the business can aim to meet the requirements for a better interchange category even though the business was not initially penalized.

Having started their business in 1988, Electronic Merchant Systems is a national payment processor and merchant services company with more than 30 years experience in the payment industry. Their mission is to help local businesses with regards to their payment processing needs and in securing different types of electronic payment processes, including stored-value cards, EBTs, all credit cards, major debit cards, and electronic check services. They always offer 24/7 customer support. Currently, they have already provided assistance to tens of thousands of retail, Internet, and start-up businesses in different locations in the United States. Approximately 95 percent of EMS customers have been able to enjoy substantial savings through a rate review. EMS has 11 regional sales offices in different parts of the US. Over 100 cities in the United States have an EMS presence.

People who would like to know more about the interchange fees can visit the Electronic Merchant Systems website at https://www.emscorporate.com/news/interchange-fees, or contact them through the telephone or via email.


For more information about Electronic Merchant Systems, contact the company here:

Electronic Merchant Systems
(800) 726-2117
250 W Huron Rd #400
Cleveland, OH 44113