Visa interchange rate October 2014 release

The Visa Fall 2014 interchange reimbursement rate release is now available for PDF download. At a glance, I didn’t spot any changes to rates, following broad changes and increases for business to business since April 2013.

The transaction and volume minimum did increase for the Credit Threshold, but the maximum chargeback ratio remains the same at 0.020%.

credit threshold visa

New higher minimums for credit performance threshold.

For merchants, no news is good news! If your company is business to business, managing interchange is critically important. The Business Electronic Interchange Reimbursement (EIRF) Fee increased from 2.75% to 2.95% in the last year. Merchants can avoid EIRF and Standard with improved interchange qualification management.

Click here for handy web page with links for to all credit card brand rates. As of October 21, 2014, MasterCard has not released an update for Fall, however, the spring update is labeled 2014 – 2015, so perhaps there will not be one.

#34 Virtual terminal selection lowers credit card processing fees: First Data Linkpoint vs CenPOS video

Can virtual terminal selection impact credit card processing fees? Yes. This video #34 compares fees using First Data Linkpoint global gateway and then CenPOS. All cloud virtual terminals are not alike. Christine Speedy, CenPOS sales, shares corporate and purchasing card interchange rate qualification on 2013 merchant statements before and after switching virtual terminals. The merchant account remained the same.



Are you a First Data Linkpint merchant looking for an alternative? With our payment technology, which includes free hosted online payments page,  you can keep your Bank of America or other First Data merchant account, yet still have all the other benefits of an omnichannel virtual terminal and gateway.

If you’re searching for an intelligent omnichannel payment solution, don’t waste another minute. Call now.


Discover adds a new Network Authorization Fee effective October 18, 2013

Following Visa and MasterCard network fees for merchants, Discover is implementing a new Network Authorization Fee effective October 18, 2013. Each authorization request sent to the Discover Network will be assessed a fee of $0.0025. As part of their merchant agreement terms and conditions, most merchants will pay this fee as a separate line item on their merchant statements. Exceptions might be merchants that have some type of bundled pricing, in which case the overall bundled pricing may increase.

discover network



Credit card processing problems for building supply companies: Part 1

Building supply companies traditionally were high volume checks, and to some extent still are. But with increasing financial pains of customers, most now also accept credit cards. Credit card processing fees can make a significant dent in profits on low margin sales. But there are other deeper issues as well.

Pain points accepting credit cards in the lumber yard and building supply industry:

  1. High fees
  2. Security- storing cards for regular customers
  3. Protection from disputes and resulting chargeback losses
  4. Expired credit cards
  5. Hours of operation impacts when remote payers can pay an invoice

Part 1 of this series addresses high credit card processing fees.

building supply

For the lowest fees, the merchant must have ALL of these elements:

  • Pass through or interchange plus pricing (not sure? See this video Interchange Plus Pricing- in 60 seconds)
  • System (hardware/software) that will pass enhanced data required for level III processing
  • Interchange management system

The four most challenging rules building supply merchants have trouble complying with for business, corporate and purchasing cards:

  • Authorization and settlement within 72 hours for all card not present sales
  • Authorization amount and settlement amount equal
  • Sending correct level III data, enhanced data that applies only to certain cards
  • Sending transaction correctly with Retail, MOTO (mail, phone, or fax orders that are key-entered) or ecommerce indicator

The test: Is your business qualifying for the lowest interchange rates possible? Pull out your merchant statement and review the pages with interchange rate qualification. (This is often the last pages of a merchant statement. If you don’t have this detail, you have a problem. )

  • Are there any descriptors with this text: STD, Standard, EIRF, electronic, commercial data rate I, commercial data rate II, commercial data rate 2, comm data rt 1, comm data rt 2, Commercial Card Electronic, Purchasing Data Rate 2?
  • If you answered yes to any of the above, then your business is NOT qualifying for the lowest fees possible.


What is MasterCard new Business Level 3 and Level 4 interchange program?

I was confused enough by wording in a recent email newsletter regarding July 2013 interchange updates that I wanted to share an explanation regarding Small Business Spend Processing and the impact on merchants, not to be confused with Level 3 data and level 3 processing.

Here’s an excerpt of the email. The key July changes include:

  • MasterCard will introduce new Business Level 3 and Level 4 interchange programs to support the new Small Business Spend Processing program.

Interchange is the main component of merchant credit card processing fees. Each credit card issued (card type) has multiple rates associated with it, with the best rate, or qualified interchange rate, achieved only by meeting all the criteria required. Merchants can influence which of the typical 3-4 rates associated with each given card type their transactions qualify for.

For business, corporate, and purchasing cards, the criteria for the lowest qualified rates includes providing enhanced data, also known as level 3 data. This is not to be confused with the new Business level 3 and 4 interchange rates, which are dependent on how much the cardholder spends.

Transactions on Business cards that participate in Small Business Spend Processing will qualify for programs based on annual cardholder spend, reviewed quarterly. Spend amounts are reviewed quarterly and updated annually.

  • $25,000-49,999 = Business level 2
  • $50,000-99,999 = Business level 3
  • $100,000+ = Business level 4

Merchants do not need to do anything to qualify for the new interchange rates. It’s business as usual.

Example: A participating small business paying with MasterCard Elite Worldcard could result in these interchange rates for a merchant, plus $.10 per transaction:

  • Business level 3, World Elite Data Rate I, 2.86%
  • Business level 3, World Elite Data Rate II, 2.16%
  • Business level 3, World Data Elite Rate III, 1.96%
  • Business level 4, World Data Elite Rate III, 2.06%

3 critical elements to qualify for Data Rate III are:

  1. sending level 3  enhanced data
  2. authorization and settlement amount are equal
  3. transaction is settled within required timeframe, usually 72 hours from the initial authorization

A lot of business to business companies don’t have transactions that meet all three criteria, so even though they’re set up for level 3 processing for credit cards , the transactions don’t all qualify.*

DISCLAIMER: The information in this article was scoured from the internet and may contain forward information subject to change, or erroneous data. Conceptually it’s accurate, however, specific numbers and rates may not be.

* Contact us for solutions to the level III qualification problem.