Interchange and Assessment are the two main fees charged by bank card networks like Visa®, Master Card®, and Discover® every time a merchant accepts one of their cards for purchases.
"Interchange is a percentage rate and transaction fee that is charged by the bank that issued the card your customer is using for a purchase
"Assessment" fee is a flat transaction fee added to the cost of processing each credit card transaction -- This fee goes to Visa®, Master card®, or Discover®.
The Assessment fee charged for a transaction is determined exclusively by the brand of the card accepted and is set by the bank card network that issued the card.
The "Interchange" rate pricing can be complex, because each card and transaction type has a unique cost, creating an assortment of over 300+ Interchange rate categories.
Here are a few of the interchange categories:
Business card acceptance method (swiped, keyed, online, etc.)
Business processing environment (retail, phone order, internet, etc.)
Information sent along with transaction (address verification, CVV2, tax amount, etc.)
Card brand and type accepted (debit, credit, rewards, corporate, etc.)
This is where things can get confusing.
Generally processors charge what is called "Interchange Plus". This is the Interchange rate Plus the additional fees. This could be interchange plus a transaction where the customer was not present with the card, which is a riskier transaction, or interchange plus the fees associated with rewards cards.
To summarize:
Your merchant pricing structure is from a combination of Interchange and Assessment fees regardless of your account fees and pricing structure. Be aware of other merchant service providers that provide low account rate and pricing structures because everyone pays the same interchange rate. Just because someone may offer a low statement fee doesn't mean they are really saving you anything if they charge you more per transaction or higher "Interchange - Plus" rates.
