When I first entered the bank card space I was asked a million times
‘What’s your rate?’. Today the same questions are asked by a merchant
base completely in the dark as to how fees are assessed.
Which brings us back to interchange - the core fees which constitute
the majority of the fee assessed to the merchant.
ISSUING AND ACQUIRING BANKS
Everyone uses plastic to make purchases. However it may
surprise you to know current credit card processing can trace its roots
back thousands of years. Did cave men use credit cards? From the fields
of the gold rush to the company store, our journey ends in the banking
structure of today.
WHAT IS INTERCHANGE?
There are only two types of people in the processing word.
Those who use credit cards and those who accept them. Many times one
person can be both! We will take a look at the needs, concerns and
issues of each, and see how one influences the other.
TIERED AND COST PLUS PRICING MODELS
Our final topic of conversation is in introduction to how
payment cards are processed. We will track the dollars from consumer to
merchant, and demystify the process. Thus armed, you will better
understand the value which you will bring to the merchant, from both a
financial and service perspective.
iProcess - Knowing the Payment Industry
Section 5 - Working with Interchange
You are what
you repeatedly do. Excellence is not an event - it is a habit
Now that you understand how a transaction works, the next step
of the iProcess is to look at the ‘foundational’ charges in the world
of payment processing.
As such, one of the most confusing concepts to deal with for new agents
is how to make sense of the fees charged to merchants, in particular
rates and transaction fees. ‘What is your rate’ is a constant thing you
will hear when you get into the field.
Early in your career their will come a point in time where you
will have an opportunity to prove a financial advantage, and a key tool
in your arsenal is providing a side by side comparison between the fees
charged by your prospects current processor and the fees you will
What is interchange?
Interchange (fee) is a term used in the payment card industry
to describe a fee paid between banks for the acceptance of card based
When funds are transferred between banks, a fee is assessed.
Interchange is the name of this fee.
Banks that issue cards to consumers are...