Understanding Visa Interchange Rates

Every time your customer swipes a card, you’ll pay two types of fees: interchange fees and markup fees. While markup fees will vary depending on your processor, interchange fees are universal, and thus, will be exactly the same no matter who processes payments for you.

Every time your customer swipes a card, you’ll pay two types of fees: interchange fees and markup fees. While markup fees will vary depending on your processor, interchange fees are universal, and thus, will be exactly the same no matter who processes payments for you.

In this article, we’ll cover the interchange rates that apply to transactions completed using the Visa Card Network in the United States. These rates are accurate as of October 8, 2019, but are subject to change.

Jump Ahead

What is Interchange?

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 total 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.

How are interchange rates determined?

Interchange fees are determined by three primary factors:

  • Business type: All businesses are categorized using merchant category codes (otherwise referred to as the MCC). These category codes reflect the type of product or service offered by the merchant and determine which rate buckets your business will fall into. Because these play such a large role in your interchange rates, it’s imperative that you ensure your business is assigned the proper MCC by your processor.
  • Card type: Certain card types incur higher interchange rates to cover the cost of associated incentive programs. A debit card, for example, will have fairly low interchange rates, whereas a gold-coated rewards card will cost a pretty penny.
  • Transaction environment: Most cards have security features like EMV chips built-in. The extent to which those features are used play a role in how much you’ll pay in interchange. You’ll pay much lower interchange fees using a physical card swipe than you would if a customer shared payment information over the phone.

As we cover Visa’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), but we’ll cover those as they arise in the rate charts below.

Visa Interchange Rates

Debit and Prepaid Cards

When it comes to debit and prepaid cards, Visa splits its fees into two types: regulated and exempt. Basically, a debit card is considered regulated when the issuing bank holds more than $10 billion in assets. If the issuing bank holds less than $10 billion in assets, the card is considered exempt.

As a merchant, you might ask yourself “how can I know whether a given transaction is regulated or exempt?” Unfortunately, there’s no clear answer. In most cases, your customers will use regulated cards (which is advantageous to you as a merchant), but until your monthly statement comes in, there’s no way to know for sure.

Card-Present Transactions

First, let’s take a look at Visa’s interchange rates for card-present transactions. Because the physical card is used in completing this transaction type, these are one of the most secure and thus, one of the least expensive.

Visa breaks these down into business and card types:

Business TypeCard TypeExempt RateRegulated RateSupermarketDebit$0.300.05% + $0.21RetailDebit0.80% + $0.150.05% + $0.21Fuel DispensaryDebit0.80% + $0.15 (max $0.95)0.05% + $0.21Service StationDebit0.80% + $0.15 (max $0.95)0.05% + $0.21Small TicketDebit1.55% + $0.040.05% + $0.21RestaurantDebit1.19% + $0.100.05% + $0.21Hotel and Car RentalDebit1.19% + $0.100.05% + $0.21Passenger TransportDebit1.19% + $0.100.05% + $0.21Travel ServiceDebit1.19% + $0.100.05% + $0.21Retail Key EntryDebit1.65% + $0.150.05% + $0.21SupermarketPrepaid1.15% + $0.15 (max $0.35)0.05% + $0.21RetailPrepaid1.15% + $0.150.05% + $0.21Fuel DispensaryPrepaid1.15% + $0.15 (max $0.95)0.05% + $0.21Service StationPrepaid1.15% + $0.15 (max $0.95)0.05% + $0.21Small TicketPrepaid1.15% + $0.150.05% + $0.21RestaurantPrepaid1.15% + $0.150.05% + $0.21Hotel and Car RentalPrepaid1.15% + $0.150.05% + $0.21Passenger TransportPrepaid1.15% + $0.150.05% + $0.21Travel ServicePrepaid1.15% + $0.150.05% + $0.21Retail Key EntryPrepaid1.75% + $0.200.05% + $0.21

Card-Not-Present Transactions

Card-not-present transactions are where most fraudulent activity comes into play. When a consumer completes a purchase online, over the phone, or by some other remote means, the merchant has very few ways of authenticating the identity of the consumer. While merchants can take precautions to avoid fraud, there is no way to avoid the higher interchange fees that come with card-not-present transactions.

Just like above, Visa separates these into business and card type:

Business TypeCard TypeExempt RateRegulated RateRetailDebit0.65% + $0.15 (max $2.00)0.05% + $0.21Debt RepaymentDebit0.65% + $0.150.05% + $0.21UtilityDebit$0.650.05% + $0.21GovernmentDebit0.65% + $0.15 (max $2.00)0.05% + $0.21Generic Card Not PresentDebit0.65% + $0.150.05% + $0.21eCommerceDebit0.65% + $0.150.05% + $0.21eCommerce Preferred1Debit1.60% + $0.150.05% + $0.21eCommerce Preferred: Hotel and Car RentalDebit1.70% + $0.150.05% + $0.21eCommerce Preferred: Passenger TransportDebit1.70% + $0.150.05% + $0.21Hotel and Car RentalDebit1.70% + $0.150.05% + $0.21Passenger TransportDebit1.70% + $0.150.05% + $0.21Account FundingDebit1.75% + $0.200.05% + $0.21Electronic IRF2Debit1.75% + $0.200.05% + $0.21Standard IRFDebit1.90% + $0.250.05% + $0.21RetailPrepaid0.65% + $0.15 (max $2.00)0.05% + $0.21Debt RepaymentPrepaid0.65% + $0.150.05% + $0.21UtilityPrepaid$0.650.05% + $0.21GovernmentPrepaid0.65% + $0.15 (max $2.00)0.05% + $0.21Generic Card Not PresentPrepaid1.75% + $0.200.05% + $0.21eCommercePrepaid1.75% + $0.200.05% + $0.21eCommerce PreferredPrepaid1.75% + $0.200.05% + $0.21eCommerce Preferred: Hotel and Car RentalPrepaid1.75% + $0.200.05% + $0.21eCommerce Preferred: Passenger TransportPrepaid1.75% + $0.200.05% + $0.21Hotel and Car RentalPrepaid1.75% + $0.200.05% + $0.21Passenger TransportPrepaid1.75% + $0.200.05% + $0.21Account FundingPrepaid1.80% + $0.200.05% + $0.21Electronic IRFPrepaid1.80% + $0.200.05% + $0.21Standard IRFPrepaid1.90% + $0.250.05% + $0.21

  1. For a transaction to qualify as eCommerce preferred, the card used in the transaction must be enabled for 3D Secure.
  2. IRF (interchange reimbursement fees) are charged when the processor does not provide sufficient transaction information to the card network to correctly categorize the fee. Some business types may qualify for a cap on this type of fee.

Credit Cards

Credit card interchange rates are quite a bit more complicated than rates charged on debit and prepaid cards -- for good reason. While debit and prepaid cards draw from an existing pool of funds, credit cards are a promise of future payment by the consumer. This poses greater risk to both the issuing bank and the card network, leading to higher interchange rates. 

Furthermore, credit cards often promise benefits to the consumer, such as cashback and point systems. The cost of these benefits is passed on to the merchant through interchange rates. As a result, interchange fees are not divided into exempt and regulated cards but are instead divided into the following reward tiers:

  • Tier 1: Visa Signature Preferred / Visa Infinite (Spend Qualified)
  • Tier 2: Visa Signature / Visa Infinite (Spend Not Qualified)
  • Tier 3: Traditional Rewards
  • Tier 4: Other

Unfortunately, it’s not exactly clear which cards fall into which tier. Basically, the higher credit score a consumer must have to hold a card, the higher tier the card will fall in. Of course, these tiers are subject to change, so you may see different rates for the same card across several months.

Additionally, you’ll find that several business types are separated into performance levels (indicated as levels 1, 2, and 3). These levels are based on the volume that the business transacted over the previous year:

  • Threshold 1: 95.5 million transactions, minimum volume of $5.82 billion.
  • Threshold 2: 58.2 million transactions, minimum volume of $3.31 billion.
  • Threshold 3: 15.2 million transactions, minimum volume of $840 million.
  • Other: does not meet any of the above performance thresholds.

Business TypeTier 1Tier 2Tier 3Tier 4Supermarket 12.10% + $0.101.65% + $0.101.15% + $0.051.15% + $0.05Supermarket 22.10% + $0.101.65% + $0.101.20% + $0.051.20% + $0.05Supermarket 32.10% + $0.101.65% + $0.101.22% + $0.051.22% + $0.05Supermarket Other2.10% + $0.101.65% + $0.101.65% + $0.101.22% $0.05Retail 12.10% + $0.101.65% + $0.101.43% + $0.101.43% + $0.10Retail 22.10% + $0.101.65% + $0.101.47% + $0.101.47% + $0.10Retail 32.10% + $0.101.65% + $0.101.51% + $0.101.51% + $0.10Retail Other2.10% + $0.101.65% + $0.101.65% + $0.101.51% + $0.10Small Ticket2.10% + $0.101.65% + $0.041.65% + $0.041.65% + $0.04Retail 2 (RTL2)12.40% + $0.101.43% + $0.051.43% + $0.051.43% + $0.05Recurring Payments to Telecommunications2.40% + $0.101.43% + $0.051.43% + $0.051.43% + $0.05Charity and Religious Organization1.35% + $0.051.35% + $0.051.35% + $0.051.35% + $0.05Government1.55% + $0.101.55% + $0.101.55% + $0.101.55% + $0.10Fuel Dispensary1.15% + $0.25 (max $1.10)1.15% + $0.25 (max $1.10)1.15% + $0.25 (max $1.10)1.15% + $0.25 (max $1.10)Service Station1.15% + $0.25 (max $1.10)1.15% + $0.25 (max $1.10)1.15% + $0.25 (max $1.10)1.15% + $0.25 (max $1.10)Utility$0.75$0.75$0.75$0.75Retail Key Entry2.10% + $0.101.95% + $0.101.95% + $0.101.80% + $0.10Generic Card Not Present2.40% + $0.10 (B2B is 2.10% + $0.10)1.95% + $0.101.95% + $0.101.80% + $0.10eCommerce Basic2.40% + $0.10 (B2B is 2.10% + $0.10)1.95% + $0.101.95% + $0.101.80% + $0.10eCommerce Preferred Retail2.40% + $0.10 (B2B is 2.10% + $0.10)1.80% + $0.101.80% + $0.101.80% + $0.10eCommerce PReferred Hotel and Car Rental2.40% + $0.102.30% + $0.101.95% + $0.101.54% + $0.10eCommerce Preferred Passenger Transport2.40% + $0.102.30% + $0.101.95% + $0.101.70% + $0.10Hotel and Car Rental Card Present2.40% + $0.102.30% + $0.101.95% + $0.101.54% + $0.10Hotel and Car Rental Card Not Present2.40% + $0.102.30% + $0.101.95% + $0.101.54% + $0.10Passenger Transport2.40% + $0.102.30% + $0.101.95% + $0.101.70% + $0.10Restaurant2.40% + $0.102.30% + $0.101.95% + $0.101.54% + $0.10Account Funding2.40% + $0.102.14% + $0.102.14% + $0.102.14% + $0.10Electronic IRF (EIRF)2.40% + $0.102.30% + $0.102.30% + $0.102.30% + $0.10Standard IRF2.95% + $0.102.70% + $0.102.70% + $0.102.70% + $0.10

  1. Only certain MCC codes qualify for this bucket, specifically schools, child care, insurance companies, and fuel companies.

Commercial and Corporate Cards

Corporate cards are divided into two types: purchasing cards and corporate travel and entertainment (T&E) cards. Purchasing cards are cards used to purchase traditional goods and services, while T&E cards are specific to travel-related costs.

Corporate Purchase and T&E Rates

Transaction TypePurchasingCorporate T&ECommercial Level III11.90% + $0.101.90% + $0.10Commercial Level II - Fuel2.05% + $0.102.05% + $0.10Commercial Level II2.50% + $0.102.50% + $0.10Commercial Card Present2.50% + $0.102.50% + $0.10Commercial Travel Service2.65% + $0.102.65% + $0.10Commercial Card Not Present2.70% + $0.102.70% + $0.10Commercial Standard IRF2.95% + $0.102.95% + $0.10Commercial Product Large Ticket1.45% + $35.001.45% + $35.00Government to Government (G2G)1.65% + $0.10(PURCHASING ONLY)GSA Large Ticket1.20% + $39.00(PURCHASING ONLY)

  1. All transactions are classified under a transaction level. In a perfect world, B2C transactions would fall under Level I, with B2B transactions in Level II and B2G transactions in Level III. Whether or not the levels align with those transaction types is up to the information the merchant collects at the time of the transaction (the more information collected, the higher the level can be). Learn more here.

Straight Through Processing Fee Program

Straight through processing (STP) is available only to financial companies and enables them to expedite the processing time of transactions. These interchange rates are determined by the size of the transaction rather than the card and business type.

STP TierInterchange RateTier 1: Less than $7,0002.00% + $0.10Tier 2: $7,000 - $14,999.991.30% + $35.00Tier 3: $15,000 - $49,999.991.10% + $35.00Tier 4: $50,000 - $99,999.990.95% + $35.00Tier 5: $100,000 or more0.80% + $35.00

Large Purchase Advantage Fee Program

When it comes to corporate purchasing cards, Visa charges special rates for card-not-present transactions over certain volume thresholds. Card-present transactions are subject to the “Purchasing and Corporate T&E” table above.

Transaction SizeInterchange Rate$10,000 or lessStandard purchasing rates apply$10,000.01 - $25,0000.70% + $49.50$25,000.01 - $100,0000.60% + $52.50$100,000.01 - $500,0000.50% + $55.50Greater than $500,0000.40% + $58.50

As you can tell, interchange rates are not super easy to understand. There are so many factors that go into interchange rates, and Visa’s various programs and incentives only make them more complicated. If you have questions about interchange fees your business is facing, feel free to contact the payments experts at SwipeSum.com. We’re happy to take a look at your statements and explain every fee you see.

If you’re sick of overpaying for card processing, SwipeSum can help with that too. We help businesses of all sizes reduce payment processing fees by forcing processors to bid for your business. To learn more, call us at (844) 312-0589 or email save@swipesum.com.

Taft Anderson

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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