Do I need to add both zip code and address for AVS to qualify for better interchange rates?

No. This article provides an in-depth review of AVS as it applies to Visa. AVS is an abbreviation for address verification service. Today we review what it is used for and how it impacts merchants for Visa cards. All of the rates shown are true interchange costs as published by Visa. Some industries may have different interchange rates, such as hotels, but the principals are the same.


Assumption:  Retail merchant key enters a transaction, with the customer present. Visa requires the zip code to match or full address match. The resulting qualified interchange rates vary depending on the card type:

  • CPS/Retail Key Entry, Debit, exempt Visa Check card – 1.65% + $0.15
  • CPS/Retail Key Entry, Debit, regulated Visa Check card – 0.05% + $0.21
  • CPS/ Retail Key Entered Credit, Visa Signature preferred- 2.10% + $0.10
  • CPS/ Retail Key Entered Credit, CPS/Rewards 2- 1.95% + $0.10
  • CPS/ Retail Key Entered Credit,Other-  1.80% + $0.10
  • Commercial cards- 2.05% + $0.10

What happens if you do not enter the zip code, or it does not match?  Automatic interchange rate downgrade to non-qualified rate EIRF. The transaction will still be approved unless the merchant has special programming to reject it, which is atypical, but the cost will go up.

  • Electronic Interchange Reimbursement Fee (EIRF), Debit- exempt Visa Check card -1.75% + $0.20
  • Electronic Interchange Reimbursement Fee (EIRF), Debit- regulated Visa Check card-  0.05% + $0.21
  • Electronic Interchange Reimbursement Fee (EIRF), Visa Signature preferred- 2.40% + $0.10
  • Electronic Interchange Reimbursement Fee (EIRF), most other Visa cards- 2.30% + $0.10
  • Commercial Electronic Interchange Reimbursement (EIRF) Fee- 2.75% + $0.10

This article does not cover every possible card option. It’s clear to see from the examples shown that not passing the correct data results in higher interchange fees to merchants from .10% to .65%. This profit does not go to your processor, but rather to the card issuing banks.

What can a merchant do to better manage interchange?

  • Ensure point of sale equipment is programmed to prompt for AVS for key entered transactions. This may not be possible with some equipment.
  • Train employees to not bypass the prompts for additional information.
  • Use technology solutions to manage interchange fees paid. For example, I offer merchants CenPOS SaaS. With this service, employees are automatically prompted for the correct data needed to qualify this and any other transaction. Merchants are given the tools to stop employees from impacting their cost of accepting credit cards, as well as impacting risk of accepting cards.

A future article will address card not present, AVS, and chargeback risk mitigation. Are you confident that your processor or agent is able to help you manage interchange? If not, call now.

3D Merchant News September 2012: fraud, Apple card swiper, mobile, interchange


  • Fraud costs
  • Mobile Payments- as easy as Apple
  • Historic $7.2 Billon dollar settlement may result in consumers paying swipe fees
  • Interchange qualification question of the day: sales tax exempt and corporate cards

Retail Fraud Taking a Greater Financial Toll According to LexisNexis® 4th Annual True Cost of Fraud Study. This year’s cost of $2.70 per $1.00 in merchandise is up $0.40 from last year’s level of $2.30. One of the areas of major fraud growth is the mobile sector. This year, mobile merchants paid $2.83 for every $1.00 lost compared to just $2.00 for 2011, an increase of more than 40 percent. If you have losses due to fraud, call me to discuss prevention options.

One mobile payment solution that really stands out you may have seen in an APPLE STORE. I recently blogged about the Linea Pro hardware Apple uses. It’s more expensive than other options, but it also can help solve more problems. A recent client meeting uncovered a desire to collect donor information at special events for auction items. One option is to combine the Linea Pro hardware with CenPOS mobile; merchants can swipe the drivers license and collect just the name & address to append the payment file. If permitted by local law, full drivers license data can be swiped as well. For the Linea Pro, or any other mobile payment need, contact me for assistance to help choose the best solution for your needs.

Payment networks Visa and MasterCard, as well as a number of large retailers, agreed to a $7.25 billion settlement that may allow merchants to impose a “checkout fee” on consumers for credit card transactions and end a seven-year battle over credit card swipe fees.

INTERCHANGE QUESTION OF THE DAY: If a customer is tax exempt, how can the transaction qualify for lower interchange rates? If a customer is tax exempt, the merchant cannot qualify the business/purchasing card transaction with level 2 data for preferred corporate card rates, which requires a sales tax other than 0. Merchants rarely know what kind of card a customer has, and have no way of knowing what the rules are for that card. CenPOS solves this problem by identifying the card issuer in real time, and automatically prompting for the right extra data ONLY when needed. For example, when using alternative payment gateways or terminals, the merchant is usually stuck with 2.65% interchange rate. With CenPOS, a processor that supports level 3 data, and the CenPOS level 3 data prompt turned on, the merchant can qualify certain MasterCard transactions as low as 1.80%, a .85% savings. Look for CORP DATA RATE I (US) PUR, CORP DATA RATE I (US) BUS, EIRF or STD on your merchant statement for examples of transactions that may have been eligible for better rates.

Warm regards,
Christine  Speedy

How does card reader and pin debit pad with Skipjack compare to CenPOS?

Credit card processing is evolving from dial up terminals to web based virtual terminals, even for the retail environment. These hosted solutions are not all alike. Addressing just the pin debit function for payment processing, CenPOS and SkipJack perform differently. The hardware set up for each in this scenario is a virtual terminal, magnetic stripe card reader and pin pad.

  • The Skipjack user must look at the consumer card and ask if it will be ‘debit or credit’.
  • The CenPOS user will automatically prompt the customer for their pin number IF it fits the merchant settings.

What’s the difference?

With Skipjack, employee decisions at the point of sale impact merchant risk and cost of accepting credit cards. With CenPOS, the customers and employees are prompted automatically to achieve the desired result at the point of sale. CenPOS is an intelligent payment platform that routes transactions based on merchant settings for risk tolerance and payment costs.

Statistically, CenPOS merchants achieve a national average of over 75% pin debit conversion. Merchants can verify this information for their account in the executive dashboard, and also create alerts for their conversion rate, such as if it falls below a certain percent.  While I don’t know other product statistics, published reports of aggregate retail merchants are substantially lower- less than 30%; most businesses I encounter  have under 10%.

What’s the merchant benefit to increase pin debit conversion?

  • 14 days for a dispute period vs 120 day for signature debit.
  • Tougher to lose disputes.
  • Dues and assessments do not apply.
  • Additionally, the Durbin Amendment requires 2 debit networks on every card. With CenPOS least  cost routing, the debit transaction will be routed to the lower cost network, according to all applicable rules.

DISCLAIMER: This review uses publicly available information posted on the competitive product web site as of 7/01/2012. The article does not address all features, just the pin debit conversion. Skipjack is a registered trademark of Skipjack Financial Services, Inc.


  • According to their web site|4347063|2831168, “PIN-based debit is currently available only for Canadian merchants.” However, I don’t think that is accurate.
  • Regardless of the features you need, CenPOS generally outperforms Skipjack when all the facts are compared, especially for automotive and business to business applications.
  • API is available to integrate into ERP and other software packages.


Contact Christine Speedy of 3D Merchant Services, authorized CenPOS reseller.  Click here to become a customer or call the hotline at the top of this web page.