Information on credit card processing fees.

1. Basics of Interchange (Cost) Plus Pricing
There are three components that make up the credit card processing fees that a customer pays.
Interchange – Non-negotiable – This is the value Visa/MC/Discover has assigned to
every different card type based on the way it is processed. This portion of the rate paid
goes to the issuing bank of the debit/credit cards. This information is public and can be
found at www.visa.com and www.mastercard.com.
Assessment Fees – Non-negotiable – This portion of the rate paid goes to
Visa/MC/Discover as the Card Associations. This is where Visa/MC/Discover makes
money as businesses in the credit card processing industry. This information isn’t found
as easily as Interchange, but your processing company should share that with you.
Processing Fees – Negotiable – This is the portion of the program that varies from
company to company. This is where the credit card processing company makes its
revenue on a merchant. There is a percentage added on above Interchange and
Assessment Fees for the processing company to provide their services.
Interchange Plus pricing is by far the most efficient way for a business to process credit/debit
card transactions. It breaks out all of the “true costs” charged by the processor, and allows no
ability for any rate manipulation by the processing company. It also allows you to receive the
full benefits of the recent Durbin Amendment legislation.
There are two different pricing strategies used when setting up a merchant account for a
business.
19 Lewis Street Hartford, CT 06103 866-257-3250
www.integritymerchantsolutions.com

2. Unbundled. Unbundled pricing is actually Interchange Plus pricing which was explained
above. We are unbundling each of the different factors that make up the total rate
paid.
Bundled. Bundled pricing occurs when the processing company takes all of the different
rates charged by Visa/MC/Discover, adds the Assessment Fees and their Processing Fees
and groups everything together. They then offer a “Bundled” or “Tiered” program
where you as the merchant may be offered only 3 or 4 different rates for all of the
different types of cards that come through your business. You may see things on your
statement such as Qualified, Mid-Qualified, or Non-Qualified, or Rates 1, 2, 3 or 4. Very
often in a bundled program the processing company may be offering a competitive
“Qualified” discount rate for your typical consumer credit cards, but then inflates every
other category to make up for being somewhat competitive on the “Qualified”
transactions.
A lot of credit card processing companies use “Bundled” pricing because it is more lucrative for
them. They make more money because they can hide their processing costs in many of the
rates charged to the merchant.
Unbundled or Interchange Plus pricing is better for the merchant. It is complete disclosure.
When set up properly on an Interchange Plus program, a merchant could actually audit the
rates charged on the statement to the public information on Visa/MC websites.
19 Lewis Street Hartford, CT 06103 866-257-3250
www.integritymerchantsolutions.com