Understanding Pricing

As a business owner how do you understand the complex Visa and MasterCard pricing? Visa and MasterCard have categories where transactions may qualify depending on not only the type of card and transaction, but also by the method in which it is processed. These categories are called interchange and the wholesale pricing to processors is based on these interchange categories and account for most of the price that you pay to process credit cards. Interchange categories have a percentage, a transaction fee, and dues, fees, and assessments. When you process a credit card, it qualifies in one of these interchange categories. The pricing attached to the interchange categories depend on the risk of the transaction type. A merchant will receive savings on some transactions when they follow the additional requirements that Visa and MasterCard have mandated for the transactions to qualify for the best rate.