Interchange Optimization
Interchange, generally the largest portion of the Merchant Discount Rate, represents the fees paid to the card-issuing banks in exchange for the service of underwriting and providing credit cards.
Interchange rates are established by the Card Association and are paid by acquirers to card issuers on purchase transactions conducted on a particular card. Interchange is a necessary and efficient method by which the Card Associations maintain a strong a vibrant payments network. The setting of interchange rates is a challenging proposition that involves an extremely delicate balance. If interchange rates are set too high, such that they lead to a disproportionately high Merchant Discount Rate, then the merchants' desire and demand for card acceptance will drop. If interchange rates are set too low, card issuers' willingness to issue and promote the cards will drop, as will consumer demand for such cards. In response to these competitive forces, the Card Associations strive to maximize the value of the Interchange system, including the dollar volume spent on cards, the number and types of cards in circulation and the number and types of merchant accepts cards by setting default interchange rates at levels that balance the benefits and costs to both cardholders and merchants.
Each Card Association has its own interchange program; combined, there are more than 300 levels of interchange.
It’s a Fact
Paying a low discount rate and reducing your organization’s transaction processing costs to the greatest extent possible now depends almost entirely on compliance with the Card Association’s ever growing body of operating regulations for data formatting and submission of correctly populated transaction records
It’s a Fact
IPPay is commited to putting you in charge by monitoring for compliance with association regulations – which is the primary driver of cost and chargeback risk. We stand alone in having the organizational and product skill set required to manage the various (and serious) implications of non-compliance
It’s a Fact
Paying a low discount rate requires a relationship with a merchant services provider with the ability to identify and deliver the optimal acceptance solution for your organization. IPPay evaluates processing methods, transaction mix, the nature of your business, and its payments acceptance environments to determine the best solutions for you.
It’s a Fact
IPPay can develop and deploy a solution that will address your organization’s specific payments acceptance needs. Contact us now for details on the features, functionality and benefits of our products or to request a no cost, no obligation payments processing analysis.
