What is interchange, and why should you care?
If you accept cards at your Georgia business, most of what you pay on every sale is something called interchange. Understanding what is interchange is the single most useful thing a merchant can learn, because it separates the part of your bill that nobody can change from the part your processor invents. Once you can tell those two apart, comparing quotes stops being guesswork.
Interchange is the wholesale fee that the card networks — Visa, Mastercard, Discover, and American Express — set on every card transaction. It is paid to the bank that issued your customer's card. Your processor does not keep this money and cannot discount it. Every processor in the country, from the biggest bank to the smallest agency, pays the exact same interchange rate for the exact same transaction. That is the key fact most sales reps hope you never learn.
Where interchange sits in the fee stack
Your total processing cost is really three layers stacked together:
- Interchange — paid to the customer's issuing bank. Fixed by the networks.
- Assessments — a small slice paid to Visa or Mastercard themselves. Also fixed.
- Processor markup — what your provider charges to move the transaction. This is the only negotiable layer.
When a processor quotes you one blended rate like "2.6% and a dime," they are bundling all three layers into a single number so you cannot see how big that third layer really is. A free statement review exists precisely to pull those layers apart.
Why interchange varies so much
There is no single interchange rate. There are hundreds. The network assigns a rate to each transaction based on a few factors, and those factors explain why two sales of the same dollar amount can cost you different amounts.
The type of card matters
A basic debit card carries a low interchange rate. A consumer rewards card — the kind that earns airline miles or cash back — carries a much higher one, because someone has to fund those rewards, and that someone is the merchant. Corporate and business cards sit higher still. So when a customer pays with a premium travel card, your cost on that sale genuinely goes up, and no processor can prevent it.
How the transaction is run matters
The same card costs you less when it is dipped or tapped in person than when the number is typed in by hand. Card-present transactions qualify for lower interchange because the risk of fraud is lower. Keyed-in and online transactions land in higher-cost categories. This is why your setup — a modern POS system versus a virtual terminal for phone orders — directly affects your effective rate. Running cards the right way keeps more transactions in the cheaper buckets.
Your industry matters
Networks publish special interchange categories for certain sectors — grocery, fuel, restaurants, charities, and more. A supermarket accepting EBT and card payments faces a different rate table than a boutique. Matching your business to the right category, and making sure transactions carry the data to qualify for it, can quietly save real money.
Why interchange updates every April and October
Visa and Mastercard revise their interchange tables twice a year, in April and October. Rates on some card categories go up, a few go down, and new categories appear. This twice-yearly rhythm is where a lot of merchants silently start overpaying.
Here is the trap. On honest pricing, when interchange rises two cents on a category, you pay two cents more and your processor earns the same as before. But on a fixed blended or tiered plan, the processor keeps charging you the same headline rate while its own cost drops — or worse, it uses the update as cover to nudge your rate up. You never see it, because the interchange layer was hidden inside the blend all along.
Interchange-plus: the honest way to pass it through
The transparent alternative is called interchange-plus pricing. Under it, your bill shows the true interchange for each sale, plus a clearly stated, fixed markup — say, interchange plus 0.30% and 10 cents. Because interchange is identical for everyone, the only number you are really shopping is that markup. It is visible, it does not drift at the October update, and it lets you verify every statement.
Consider a store doing $40,000 a month at a blended 3.5%. That is $1,400 in fees. If the genuine interchange and assessments on that mix run near 2.0%, the merchant is handing over roughly 1.5% — about $600 a month — in markup and padding. Move to interchange-plus at a fair margin and a large chunk of that gap comes back. Our free savings calculator lets you model your own numbers in a couple of minutes.
What this means for your business
You cannot negotiate interchange, and you should be suspicious of anyone who claims they can. What you can do is choose pricing that shows it honestly, run transactions in the lowest-cost way your setup allows, and make sure your business is mapped to the right category. For merchants who want to shift the remaining cost, dual pricing offsets up to 100% of fees by passing them to customers who choose to pay by card. You can read more about your options on our credit card processing page or across the industries we serve.
If you want to see exactly how much of your bill is real interchange and how much is markup, request a free statement review. If our free audit can't find at least 20% in savings, we hand you $100 — and either way, you will finally understand every line of your bill. Prefer to talk it through? Book a call and we will walk your statement together.