Online payments

Interchange Rate Updates

As a merchant, you’re probably familiar with interchange rates and how they affect your business. A customer pays with a credit card at the POS, you generate a profit, and then the credit bank issues a fee for financing that particular transaction. Circling back to 1990’s, the credit card process remains unchanged using instant authorization to allow customers to pay for goods and services without worry. Fast-forward to 2020, and credit card users can now make purchase through mobile wallets, online webpages, etc.

Why we’re seeing these changes now

Whenever a major payment brand such as VISA or Mastercard adjusts interchange rates, it affects more than just the merchant. Retailers endure egregious fees to accept electronic payments accounting for approximately $100 billion each year. Typically, VISA and Mastercard meet at least twice a year around April and September to discuss changes to interchange rates. Because payments have evolved so vastly over the past 30 years, we have to be ready to adapt to a new financial ecosystem.

What to expect

Recently, VISA implemented an increase on interchange rates for transactions where the credit card was not physically present at the time of purchase (i.e. online orders, phone calls, etc.). In contrast, customers who purchase at the POS using EMV chips may actually have lowered interchange fees, Be sure to examine your merchant statements around February and March each year for more specific information on interchange rates and how they may affect your business.

Need a second glance?

Send your merchant credit card statements to for a personalized review. Our team is eager to discuss your rates and how FPN might be able to lower your monthly fees!