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Merchant Account Services Interchange Pass Through Versus Tiered Pricing | Houston Texas

Interchange Pass Through

What exactly is Interchange Pass-Through? Simply put, it is the Wholesale Pricing (Cost Basis) for all Credit Card Processors in the United States.

“Interchange is the wholesale pricing established and maintained solely by Visa USA© and MasterCard Worldwide© for authorization and settlement of credit card transactions. Interchange serves as the benchmark for which all credit card processors must base their merchant pricing”.

Interchange rates are based on the three following factors:

  1. Type of Business (Restaurant, Retail, Hotel, Car Rental, etc)
  2. Card Type (Debit Card, Consumer Card, Rewards Card, etc)
  3. Type of Purchase (Face to Face, Non Face to Face)

Each month your merchant account statement will provide a detailed outline of the different types of credit cards received by your business and the rates and fees assessed by Visa USA© and MasterCard Worldwide©. These Interchange Categories include Card Type, # of Transactions, Card Volume and the Interchange Fee associated with a card type.

Without question, Interchange Pass-Through is the most economical pricing format in the credit card processing industry today!

Tiered Pricing

Since the inception of credit card processing, merchants have struggeled to gain an accurate view of the rates and fees they are being assessed each month. With it’s mind numbing calculations and impossible to read merchant statements, Tiered Pricing was and still remains a very profitable format for credit card processors!

To understand Tiered Pricing, it must be placed in laymans terms. Imagine purchasing groceries at your local supermarket and the receipt only provided two items to confirm your purchase. The # of items and the total amount paid for the groceries. With Tiered Pricing this is exactly what you receive. You have no idea what the individual fees are for the milk, bread and vegetables. You do however now understand where to find the pain reliever!

Below are several items typically found in a Tiered Pricing format:

  • Qualified Rate
  • Non Qualified Rate
  • Transaction Fee
  • Batch / Header Fee
  • Monthly Fee
  • Cancellation Fee
  • Annual Fee

If you are having difficulty understanding your current merchant account statement,

please fax a recent statement to 866-362-0094 or
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