What Is InterchangePlus

InterchangePlus is the best way to price a merchant account. InterchangePlus is usally reserved for major corporations because of the saving that results by having a wholesale direct cost. The more common type of merchant account is "Three Tier" pricing and can cost merchant's many times more. With tiered pricing some merchant account providers can take advantage of the fact that you can't exactly compare their pricing to each other and play tricks such as marking up the downgrades, inconsistent tiered, mid qualified and non qualified.

With 1st American Card Service's innovative new InterchangePlus program there are no surprises and you will be in good company with the largest businesses in America.

How It Works

Its very simple. Both Visa and MasterCard publish the merchant's processing bank's Wholesale Interchange charts on their websites. The Interchange charts reflect every possible cost for every type of card, there are over 500 categories, but usally only about 10 apply to most businesses.

Wholesale Interchange Rate Charts:

Visa Interchange (PDF)

MasterCard Interchange (PDF)

To determine a rate you just need to find the card type in the Interchange tables and add the mark-up:
Card Type: Visa-CPS/Supermarket Credit Interchange = 1.15% + .05¢
Plus Cost = 0.20% + .11¢
Cost: (1.15% + .05) + (.20% + .11¢) = 1.35% + .16¢

InterchangePlus is the most transparent form of pricing for Merchant Account services. Interchange is the wholesale cost that all banks must be charged by VISA and Mastercard. InterchangePlus means that we pass through our Wholesale cost that we are getting charged, plus a simple flat markup for all the service we render for our merchants.

Historically only the largest merchants with the most negotiating power were able to get InterchangePlus pricing but the market is getting increasingly competitive and merchants are becoming better informed, 1st American Card Service can now offer this to smaller companies.

Interchange Plus Benefits:

No Qualified Discount Rates
No Mid Qualified Discount Rates
No Non Qualified Discount Rates
No Surcharges
No Downgrades
No Hidden Fees

How InterchangePlus Saves You Money

Merchant processing statements are often confusing and hard to understand. This allows Processing Companies to add fees that clearly designed to be misundertood. To help understand why InterchngePlus offers simple and honest prices we will present a typical monthly statement. To illustrate some of the common deceptions that can increase your costs.

1) What types of cards are these?

By not identifying the card type, many processors charge you more for lower-cost transactions. Debit card transactions, for example, usually cost less than credit card transactions. Make sure you're being charged less.

2) Not all card transactions are created equal.

The card companies charge more than 250 interchange rates, depending on the type of business, card and transaction. To make it even more confusing, many processors create their own categories like "qualified," "non-qualified" and "mid-qualified" as a way to mark up the rate card companies charge without full disclosure.

3) "Total card fees" don't represent the real total.

In this statement, you need to add the "less discount paid" line item (the fee you pay your processor) to the "total card fees" line item (the interchange you pay) to arrive at your real bottom-line costs. "Total card fees" is just part of the total you pay.

4) What is a "discount rate"?

"Discount rate" is an industry-accepted term for the fee your processor charges. However, many processors quote you a low in-the-door discount rate without disclosing that most of your transactions won't qualify for it. Look at your statement carefully, and you'll likely see many transactions charged at much higher rates.

5) Beware of bill-backs and other surcharges.

Many processors hide arbitrary charges often classified as "bill-backs" and "surcharges" without disclosing them to you. They charge a low discount rate on all of your transactions, then add extra surcharges to them some of which are billed the month the transaction occurs and others the following month. This makes reconciling charges and figuring out your total monthly costs even more difficult.

6) Take note of additional fees.

There may be even more fees from per-transaction to batching, authorization, annual charges and more. Understand what they are and why you're paying them. It's possible some are just randomly included.

7) "AVS" is supposed to lower costs by decreasing the risk of fraud.

The Address Verification Service (AVS) compares a customer's address with the billing address linked to the credit card. When you use AVS, transactions qualify for a lower rate because you're reducing the risk of fraud. Some processors don't pass this savings on to you. In fact, some actually charge you more.

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