Get FREE Quote

The Relationship Between Interchange Fees and Credit Card Processing

Merchants who accept credit cards as one of their payment options must pay an interchange fee for every transaction. This fee is an integral part of credit card processing, and a necessary expense for every business holding a merchant account. The merchant is responsible for paying this fee, since accepting credit cards is not exactly a requirement. The fee covers the maintenance and security costs associated with keeping this system in place.

The relationship between credit card processing and interchange fees is an interesting one to say the least. On one hand, most merchants understand the importance of accepting credit cards. They know offering this convenient payment method will attract customers, increase sales, and decrease their liabilities. In contrast, since most business owners work hard to increase profits and cut expenses, having a mandatory fee on almost every transaction will raise concerns. Merchant account holders are aware of the fact that interchange fees will keep the system running properly. Nevertheless, it is extremely difficult to keep this fact in mind while continuously paying this fee.

The percentage deducted from each transaction is usually less than three percent. This number may seem minuscule, but after running a number of transactions through a number of merchant accounts, this can add up to a significant amount of money. So who receives the money coming from credit card transactions? Well, just over 75% of the fee goes to the cardholder’s bank. The remainder of the fee goes to the merchant’s bank for acquiring the transaction. In turn, these banks are responsible for handling any problems that may occur during a transaction such as fraud, identity theft, equipment failure, and processing errors.

Since credit card processing happens so swiftly, most individuals may believe it is an inexpensive, low-maintenance system. On the contrary, it just appears this way because it is a solid mechanism that took years to construct. As with any system, it requires regular maintenance and monitoring. The interchange fee, regardless of how taxing it seems, pays for this upkeep so the public can have a convenient payment option in the marketplace. So while the financial burden may seem as if it is unfairly placed on the merchant, this system also encourages consumers to spend, which is a plus for the merchants as well.

GET FREE QUOTE TODAY AND START SAVING


Testimonials

It took me a while to decide who I wanted to settle with to handle all of my credit card transactions because every company wants to make it sound like they're offering you the best rates. CreditCardProcessing.com was able compare and beat all of the other offers I received. They were also able to provide me the fairest price on my EMV-compliant terminal. My sales representative and the support team were there to assist every step of the way. Ultimately, I'm looking forward to a long term relationship with this company.

Roland Tran from the Hong Kong Kitchen

It is a pleasure dealing with these folks. Their pricing is fair, their statements are understandable and their employees are knowledgeable and friendly.

John MacMillian from the Great Lakes Baking Company

The service was very professional, my sales person (Steven B.) was very well versed in the product and most helpful in getting our company set up to accept credit cards via my cell phone. Their rates are some of the lowest on the market and their service is unparalleled. I will recommend them to anyone requiring a credit card processing service.

Michael Harper from Deluxe Auto Body

Jonathan C. is wonderful to work with. He is very helpful, accommodating and resolves any issue quickly. It is hard these days to find someone who gives great customer service, but I can say, Jonathan is the best! I would not hesitate to recommend him to any business owner and to assist you in helping to grow your business.

Linda Garner from Regali Da Forno

I called indecisive about getting a device, but speaking to your Sales Consultant completely settled me. He was very professional, knowledgeable and patiently walked me through the process. He always responded to my voicemails and answered all my questions. After I received my merchandise, he called following up to ensure that I had received it. Customer service I would say is 5 stars. Stellar! Thanks Credit Card Processing, I will definitely recommend you.

Sarah Morgan from Vision International Ministries
Call Us Today!

© 2017 CreditCardProcessing.com. All rights reserved. Privacy Policy
CREDITCARDPROCESSING.COM, LLC is a registered ISO of Wells Fargo Bank, N.A. Concord, CA

*Further terms and conditions may apply. Promotion contingent upon CreditCardProcessing.com's receipt of written competing offer(s).

**Certain restrictions may apply.

Promotional offers brought to you by CreditCardProcessing.com.

EMV™ is a registered trademark of EMVco, LLC. Apple, the Apple logo, iPhone and Apple Pay are trademarks of Apple, Inc., registered in the U.S. and other countries. Android™ is a trademark of Google, Inc.

Call for details.