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Interchange Fee And Why Merchants Should Choose It

Interchange Fee

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Interchange fee is an inextricable part of the online credit card processing fee. If you are looking for a payment processor, you must be familiar with this term. Well, we all are probably living in the most advanced era. We don’t know what the future will bring for us. But, it is quite evident that we have to adopt the fruitful outcomes of technology in order to survive in this competitive world. Many sectors have already adopted the technologically advanced equipment. But, there is a sector that is still in the transitional mode. Yes, we are talking about the small merchants.

After the arrival of COVID-19, the mind-set of the consumers has been completely changed. People are now preferring online transactions and along with it, they are choosing contactless mode when it comes to making payments online in the retail outlets. If your business does not accept credit card payment, you are in trouble. It will be very difficult for you to maintain the cash flow of your business. Moreover, you will lose the customer base gradually. Therefore, if you want to elevate your business, you have to adopt the technology. You need to upgrade the business equipment so that you can run your business flawlessly.

But, the fact is quite bitter. Operating an online business is not as easy as it sounds. If you are not a tech-savvy person, you will face difficulties in the beginning. There are certain things that you must know before getting into the online business. The first thing that you need is a merchant processor. A merchant processor provides an online payment gateway through which you can accept credit card payments online. There are many payment processors offering online payment gateway and International Payment Solutions is one of them. We at International Payment Solutions understand the problems that new online merchants will face. Therefore, we try to keep things as simple as possible.

There are many more things beyond the payment processor and if you have not yet made a proper research, you will definitely face issues. The credit card processing fee is very important and you must know everything about it. If you don’t know why there is a credit card processing fee, go through the following points:

  • When it comes to online transactions, the customer initiates it with his or her credit card or debit card. The customer taps or swipes the card over the payment terminal and the merchant processor receives the important credit card information through the online payment gateway. The entire process is well-secure.
  • After that, the credit card network gets the information and shares it with the credit card issuing bank. The bank checks the cardholder’s account. If there is an adequate amount of funds available, the transaction is approved otherwise, the bank declines the transaction.
  • After that, the bank shares the same information with the credit card network and the payment processor gets the information from the credit card brand. Thus, a credit card transaction gets completed.

So, you have understood that there are many organizations inextricably associated with this real-time process. Now, the online credit card pricing structure is very complicated. There are different types of pricing structures such as interchange plus pricing, flat rate pricing and many more offered by the payment processors.

We at International Payment Solutions offer interchange plus pricing structure and we recommend the new merchants to go with the interchange plus pricing structure.

Interchange Rate

Well, the interchange rate is not a single rate. There are various rates such as interchange fees, profit margin of the payment processor and card band fee associated with the interchange rate. Moreover, the interchange rate varies from customer to customer, card to card and business to business. If the customer is making the transaction through swiping, the interchange rate will be on the lower side. On the other side, if the customer is using an EMV card, the interchange rate will be on the higher side. Moreover, if the customer using a normal cashback card, there will be a nominal interchange rate and if the customer is using a high-reward card, the chargeback amount will be on the higher side.

Well, the interchange fee depends upon the type of business you are doing. If you are into charity, there will be less interchange rate. On the other side, if you are running a restaurant business, the interchange rate will always be on the higher side.

The worst part of interchange fee pricing structure is its complexities but the good thing is that it is very transparent in nature. You will know how much is the actual interchange rate is.

Not An IPS Merchant?

So, you have understood that the interchange rate is very beneficial. Now, if you want to start an online business, we will recommend you to pair your business with International Payment Solutions that is one of the efficient merchant processor solutions. If you want to elevate your business, get in touch with IPS.


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