In simple terms, interchange is the cost of completing a given card transaction. Interchange fees cover the cost of maintaining card networks, servers, and security infrastructure. Additionally, they cover any potential risk that comes with completing the transaction. This is calculated by taking the expected cost of fraud associated with a given transaction type and distributing that cost across all transactions of that type.
In simple terms, interchange is the cost of completing a given card transaction. Interchange fees cover the cost of maintaining card networks, servers, and security infrastructure. Additionally, they cover any potential risk that comes with completing the transaction. This is calculated by taking the expected cost of fraud associated with a given transaction type and distributing that cost across all transactions of that type.
No matter how your provider has priced your payment processing contract, interchange fees are part of what you pay each month. These fees are non-negotiable for merchants, though certain merchants (such as nonprofits) may qualify for reduced interchange rates.
In this article, all interchange rates will be listed as a percentage of the total transaction amount plus a static amount. For example, if a customer makes a purchase of $100 and the interchange rate associated with the transaction is listed as 2.1% + $0.10, the customer would pay $2.20 in interchange fees.
Interchange fees are determined by three primary factors:
As we cover Mastercard’s interchange rates in the coming sections, you’ll see how each of these factors play into the rates you see. There are other factors that can determine interchange rates (such as volume thresholds and so on), but we’ll cover those as they arise in the rate charts below.
The following interchange tables are current as of November 8, 2019.
For debit card transactions, Mastercard has separated transactions into two types: regulated and unregulated. This division has nothing to do with the consumer, but with the bank from which their card was issued. Cards are considered regulated if they are issued by banks with assets totaling more than $10 billion. If the issuing bank has not reached that threshold, the card will be considered unregulated.
IRDUnregulated debit rateCharities1.45% + $0.15Emerging markets0.80% + $0.25Emerging markets (education and government)0.65% + $0.15 ($2.00 max)Full UCAF*1.65% + $0.15Key-entered1.65% + $0.15Lodging and auto rental1.65% + $0.15Merchant UCAF1.65% + $0.15Merit I1.65% + $0.15Merit I (Real Estate)1.10% + $0.00Merit I (Consumer Loans)0.80% + $0.25 ($2.95 max)Merit III Base **1.05% + $0.15Merit III Tier 10.70% + $0.15Merit III Tier 20.83% + $0.15Merit III Tier 30.95% + $0.15Passenger Transport1.60% + $0.15Payment Transaction0.19% + $0.53Payment Transaction (Government Owned Lottery)0.00% + $0.10Petroleum Dispensary0.70% + $0.17 ($0.95 max)Petroleum Service Station0.70% + $0.17 ($0.95 max)Restaurant1.19% + $0.10Service Industry1.15% + $0.05Small Ticket Base***1.55% + $0.04Small Ticket Tier 11.30% + $0.03Standard1.90% + $0.25Supermarket Base1.05% + $0.15 ($0.35 max)Supermarket Tier 1N/ASupermarket Tier 2N/ASupermarket Tier 3N/AUtilities0.00% + $0.65Consumer Debit Refund 10.00% + $0.00Consumer Debit Refund 20.00% + $0.00Consumer Debit Refund 30.00% + $0.00
* UCAF refers to Mastercard’s Universal Cardholder Authentication Field. In order to qualify for these interchange rates, merchants must utilize the Mastercard SecureCode program, which is rooted in 3D Secure technology. Essentially, this program requires consumers to provide an identification code when making purchases online.
** See the table below for explanations of Merit tiers.
*** See the table below for explanations of Small ticket tiers.
Merit tiers
TierMinimum Annnual VolumeMerit III Tier 1$400 millionMerit III Tier 2$275 millionMerit III Tier 3$175 millionMerit III Base
Small ticket tiers
TierMinimum Annnual VolumeSmall Ticket Base
IRDRegulated debit ratePurchasesRegulated Point-of-Sale (POS) Debit0.05% + $0.21Regulated POS Debit with Fraud Adjustment0.05% + $0.22Regulated POS Debit Small Ticket0.05% + $0.21Regulated POS Debit Small Ticket with Fraud Adjustment0.05% + $0.22Credit (Refunds/Returns)Regulated Point-of-Sale (POS) Debit0.00% + $0.00Regulated POS Debit with Fraud Adjustment0.00% + $0.00Regulated POS Debit Small Ticket0.00% + $0.00Regulated POS Debit Small Ticket with Fraud Adjustment0.00% + $0.00Payment TransactionsPayment Transaction0.19% + $0.53Payment Transaction (Government-owned Lottery)0.00% + $0.10
Similar to regular debit cards, prepaid cards are also divided into regulated and unregulated pools. However, their interchange rates differ from the rates incurred by typical debit cards.
Unregulated prepaid debit
IRDUnregulated prepaid debit rateCharities1.45% + $0.15Emerging markets0.80% + $0.25Emerging markets (education and government)0.65% + $0.15 ($2.00 max)Full UCAF1.76% + $0.20Key-entered1.76% + $0.20Lodging and auto rental1.15% + $0.15Merchant UCAF1.76% + $0.20Merit I1.76% + $0.20Merit I (Real Estate)1.10% + $0.00Merit I (Consumer Loans)0.80% + $0.25Merit III Base1.05% + $0.15Merit III Tier 10.70% + $0.15Merit III Tier 20.83% + $0.15Merit III Tier 30.95% + $0.15Passenger Transport1.60% + $0.15Payment Transaction0.19% + $0.53Payment Transaction (Government Owned Lottery)0.00% + $0.10Petroleum Dispensary0.70% + $0.17 ($0.95 max)Petroleum Service Station0.70% + $0.17 ($0.95 max)Restaurant1.19% + $0.10Service Industry1.15% + $0.05Small Ticket Base1.55% + $0.04Small Ticket Tier 11.30% + $0.03Standard1.90% + $0.25Supermarket Base1.05% + $0.15 ($0.35 max)Supermarket Tier 1N/ASupermarket Tier 2N/ASupermarket Tier 3N/AUtilities0.00% + $0.65Consumer Debit Refund 10.00% + $0.00Consumer Debit Refund 20.00% + $0.00Consumer Debit Refund 30.00% + $0.00
Regulated prepaid debit
IRDRegulated prepaid debit ratePurchasesRegulated Point-of-Sale (POS) Debit0.05% + $0.21Regulated POS Debit with Fraud Adjustment0.05% + $0.22Regulated POS Debit Small Ticket0.05% + $0.21Regulated POS Debit Small Ticket with Fraud Adjustment0.05% + $0.22Credit (Refunds/Returns)Regulated Point-of-Sale (POS) Debit0.00% + $0.00Regulated POS Debit with Fraud Adjustment0.00% + $0.00Regulated POS Debit Small Ticket0.00% + $0.00Regulated POS Debit Small Ticket with Fraud Adjustment0.00% + $0.00Payment TransactionsPayment Transaction0.19% + $0.53Payment Transaction (Government-owned Lottery)0.00% + $0.10
Conveniently, Mastercard’s commercial debit rates are identical to their regulated consumer debit rates. Take a look at the table above to understand these rates.
IRDCommercial prepaid rateCharities2.00% + $0.10Data Rate I2.65% + $0.10Data Rate I (Healthcare)1.00% ($5.00 max)Data Rate II2.65% + $0.10Data Rate II (Petroleum)2.05% + $0.10Payment Transaction0.19% + $0.53Rebate0.00% + $0.00Standard2.95% + $0.10Travel and Entertainment2.35% + $0.10Utilities0.00% + $1.50Commerical Refund Group 12.37% + $0.00Commercial Refund Group 22.30% + $0.00Commercial Refund Group 32.21% + $0.00Commercial Refund Group 42.16% + $0.00
IRDPIN debit interchange ratePurchases, Payment TransactionsPIN Debit All Other Base0.90% + $0.15PIN Debit Convenience0.75% + $0.17 ($0.95 max)PIPN Debit Supermarket/Warehouse1.05% + $0.15 ($0.35 max)PIN Debit Payment Transaction0.19% + $0.53PIN Debit Payment Transaction (Government-owned lottery)0.00% + $0.10PIN Regulated Point-of-Sale (POS) Debit0.05% + $0.21PIN Regulated POS Debit with Fraud Adjustment0.05% + $0.22Credits (Refunds/Returns)PIN Unregulated - Credits0.00% + $0.00PIN Regulated - Credits0.00% + $0.00
When compared with other card networks, Mastercard has really simplified how credit card transactions are categorized. Cards on the Mastercard network are separated into one of five buckets: Core, Enhanced Value, World, World High Value, or World Elite. These buckets determine interchange rates in conjunction with the merchant type.
IRDCoreEnhanced ValueWorldWorld High ValueWorld EliteAirlineN/AN/AN/A2.30% + $0.102.30% + $0.10Charities2.00% + $0.102.00% + $0.102.00% + $0.102.00% + $0.102.00% + $0.10Convenience Base1.90% + $0.001.90% + $0.002.00% + $0.002.00% + $0.002.00% + $0.00Convenience Tier 11.35% + $0.001.35% + $0.001.45% + $0.001.60% + $0.001.60% + $0.00Full UCAF1.89% + $0.102.04% + $0.102.05% + $0.102.50% + $0.102.50% + $0.10Key-entered1.89% + $0.102.04% + $0.102.05% + $0.102.50% + $0.102.50% + $0.10Lodging and Auto Rental1.58% + $0.101.80% + $0.10N/AN/AN/AMerchant UCAF1.89% + $0.102.04% + $0.102.05% + $0.102.50% + $0.102.50% + $0.10Merit I1.89% + $0.102.04% + $0.102.05% + $0.102.50% + $0.102.50% + $0.10Merit I (Insurance)1.43% + $0.051.43% + $0.051.43% + $0.052.20% + $0.102.20% + $0.10Merit I (Real Estate)1.10% + $0.001.10% + $0.001.10% + $0.002.20% + $0.102.20% + $0.10Merit III Base1.58% + $0.101.73% + $0.101.77% + $0.102.20% + $0.102.20% + $0.10Merit III Tier 11.43% + $0.101.43% + $0.101.53% + $0.102.05% + $0.102.05% + $0.10Merit III Tier 21.48% + $0.101.48% + $0.101.58% + $0.102.05% + $0.102.05% + $0.10Merit III Tier 31.55% + $0.101.55% + $0.101.65% + $0.102.15% + $0.102.15% + $0.10Passenger Transport1.75% + $0.101.90% + $0.10N/AN/AN/APayment Transaction0.19% + $0.530.19% + $0.530.19% + $0.530.19% + $0.530.19% + $0.53Payment Transaction (Govt-owned Lottery)0.00% + $0.100.00% + $0.100.00% + $0.100.00% + $0.100.00% + $0.10Petroleum Base1.90% + $0.00 ($0.95 max)1.90% + $0.00 ($0.95 max)2.00% + $0.00 ($0.95 max)2.00% + $0.00 ($0.95 max)2.00% + $0.00 ($0.95 max)Public Sector1.55% + $0.101.55% + $0.101.55% + $0.101.55% + $0.101.55% + $0.10RestaurantN/AN/A1.73% + $0.102.20% + $0.102.20% + $0.10Service Industry1.15% + $0.051.15% + $0.051.15% + $0.051.15% + $0.051.15% + $0.05Standard2.95% + $0.102.95% + $0.102.95% + $0.103.25% + $0.103.25% + $0.10Supermarket Base1.48% + $0.101.48% + $0.101.58% + $0.101.90% + $0.101.90% + $0.10Supermarket Tier 11.15% + $0.051.15% + $0.051.25% + $0.051.25% + $0.051.25% + $0.05Supermarket Tier 21.15% + $0.051.15% + $0.051.25% + $0.051.25% + $0.051.25% + $0.05Supermarket Tier 31.22% + $0.051.22% + $0.051.32% + $0.051.32% + $0.051.32% + $0.05Travel & EntertainmentN/AN/A2.30% + $0.102.75% + $0.102.75% + $0.10T&E Large TicketN/AN/AN/A2.00% + $0.002.00% + $0.00Utilities0.00% + $0.650.00% + $0.650.00% + $0.650.00% + $0.750.00% + $0.75Consumer Credit Refund Group 1N/AN/A2.42% + $0.002.42% + $0.002.42% + $0.00Consumer Credit Refund Group 22.09% + $0.002.09% + $0.002.09% + $0.002.09% + $0.002.09% + $0.00Consumer Credit Refund Group 31.95% + $0.001.95% + $0.001.95% + $0.001.95% + $0.001.95% + $0.00Consumer Credit Refund Group 41.82% + $0.001.82% + $0.001.82% + $0.001.82% + $0.001.82% + $0.00Consumer Credit Refund Group 51.73% + $0.001.73% + $0.001.73% + $0.001.73% + $0.001.73% + $0.00
Consumer credit tiers
TierMinimum Annual Volume (All Card Types)Merit IIITier 1$1.80 billionTier 2$1.25 billionTier 3$750 millionBaseSupermarketTier 1$6.00 billionTier 2$2.00 billionTier 3$750 millionBaseConvenience PurchasesTier 1$1.00 billion
Mastercard issues two types of commercial credit cards: small business and large market cards. In general, the liability for a small business card falls to the business owner or cardholder, while the associated corporation will be held liable for a large market card. Due to their relative security, large market cards tend to have lower interchange rates.
Small business
Similar to its consumer credit line, Mastercard has divided all small business cards into 5 buckets: Business Core, Business World, Business World Elite, and the interestingly named Level 4 and Level 5 cards.
IRDBusiness CoreBusiness WorldBusiness World EliteLevel 4Level 5Charities2.00% + $0.102.00% + $0.102.00% + $0.102.00% + $0.102.00% + $0.10Data Rate I2.65% + $0.102.80% + $0.102.85% + $0.102.95% + $0.103.00% + $0.10Data Rate II1.90% + $0.102.05% + $0.102.10% + $0.102.20% + $0.102.25% + $0.10Payment Transaction0.19% + $0.530.19% + $0.530.19% + $0.530.19% + $0.530.19% + $0.53Rebate0.00% + $0.000.00% + $0.000.00% + $0.000.00% + $0.000.00% + $0.00Standard2.95% + $0.103.10% + $0.103.15% + $0.103.25% + $0.103.30% + $0.10Travel & Entertainment2.35% + $0.102.50% + $0.102.55% + $0.102.65% + $0.102.70% + $0.10Utilities0.00% + $1.500.00% + $1.500.00% + $1.500.00% + $1.500.00% + $1.50Commercial Refund Group 12.37% + $0.002.37% + $0.002.37% + $0.002.37% + $0.002.37% + $0.00Commercial Refund Group 22.30% + $0.002.30% + $0.002.30% + $0.002.30% + $0.002.30% + $0.00Commercial Refund Group 32.21% + $0.002.21% + $0.002.21% + $0.002.21% + $0.002.21% + $0.00Commercial Refund Group 42.16% + $0.002.16% + $0.002.16% + $0.002.16% + $0.002.16% + $0.00
Large market
IRDLarge market credit rateCharities2.00% + $0.10Data Rate I2.70% + $0.10Data Rate I (Healthcare)1.00% ($5.00 max)Data Rate II2.50% + $0.10Data Rate II (Petroleum)2.20% + $0.10Data Rate III1.90% + $0.10Large Ticket1.45% + $35.00Payment Transaction0.19% + $0.53Rebate0.00% + $0.00Standard2.95% + $0.10Travel and Entertainment2.65% + $0.10Commerical Refund Group 12.37% + $0.00Commercial Refund Group 22.30% + $0.00Commercial Refund Group 32.21% + $0.00Commercial Refund Group 42.16% + $0.00
If you have any questions about Mastercard interchange rates or if you’re looking to reduce what you pay in credit card processing fees, the experts at SwipeSum are here to help! We are an extension of your financial team laser-focused on making your payments solution better. Visit us at SwipeSum.com or call (314) 390-1461 to learn more.
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Taft Anderson is the former Product Marketing Manager of Swipesum. A graduate of Washington University in St. Louis' Olin Business School, Taft is a content and branding expert.
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