If your company accepts credit card payments (which it should), chances are, you’re going to be affected by Visa’s interchange rates. Visa is one of the biggest payment networks in the world, with ~4.2B cards currently in use. So it’s virtually impossible for a business to not accept Visa cards.
Visa interchange rates are the fees charged by Visa to process transactions between issuing banks and merchants. These fees cover the costs of managing the network, ensuring security, and facilitating the transfer of funds between banks.
Visa generally updates interchange rates semiannually, so if you’re looking to keep up with the card network’s rates, you can check them twice a year.
Overall, understanding interchange rates is crucial for anyone who accepts credit card payments because they form the foundation of the fees you’ll encounter when taking credit cards. It’s wise for merchants to keep an eye on these rates as they can affect their bottom line and profitability.
TL;DR
- Interchange rates are the fees charged by credit card networks.
- Visa had put off interchange rate changes during the pandemic years, so they’ve been introducing changes in two phases, with the second wave of updates coming in April 2024.
- While you can’t avoid the rate hikes, there are strategies and resources available to help merchants mitigate the impact.
What Exactly are Interchange Rates?
Interchange rates are the fees credit card networks (like Visa, Mastercard, American Express, and Discover) charge to facilitate card transactions between merchants and banks. These rates are set and collected by the network for processing transactions and maintaining the payment infrastructure.
Factors That Affect Visa Interchange Rates
As with other credit card networks, Visa sets interchange reimbursement fees based on factors that influence the cost and risk of processing transactions. Understanding these variables can help you, the merchant, make smarter decisions about how to accept Visa cards and manage payment processing.
Card type
Interchange rates can vary significantly depending on the type of Visa card used—whether it’s a basic Visa debit card, a Visa Signature Preferred credit card, or a Visa Keyed Business or Visa Debit CPS card.
Generally, debit cards tend to have lower interchange fees than credit cards, especially when processed as card-present transactions.
On the other hand, premium or rewards cards—like Visa Keyed Rewards Signature or Traditional Rewards—often come with higher rates due to the perks they offer cardholders, which are funded in part by interchange reimbursement fees. Understanding the mix of card types your customers use can help you forecast transaction fees more accurately and choose the right credit card processor for your business.
Merchant category code (MCC)
Your merchant category code (MCC) plays a significant role in determining which Visa interchange rates apply to your business. Visa assigns interchange reimbursement fees to different MCCs based on industry norms and risk levels.
For example, supermarkets may qualify for a special supermarket tier with lower rates, while merchants in travel or services may face higher fees. Your business type impacts how Visa and other card issuers view your transactions—and whether you qualify for lower rates or special program rates. Ensuring your MCC is accurate and optimized is essential, as misclassification can lead to fee increases and missed opportunities to save on processing fees.
Transaction type
Whether a transaction is card-present or card-not-present has a major impact on the interchange rates you’re charged. Card-not-present transactions—like online transactions, keyed-in sales, and phone orders—tend to carry higher interchange fees due to the increased risk (think fraud and lack of physical card verification).
In contrast, card-present transactions made via EMV chip technology, tap, or swipe are typically cheaper to process. Visa also offers different rates for money transfers, recurring payments, and purchasing cards, each tied to a specific transaction environment and program rate. If your team understands how to process transactions the right way—whether it’s using a chip reader or encouraging contactless payments—you can lower your merchant discount rate and reduce the fees charged by your payment processors.
Visa Interchange Rates
At the time of writing, Visa last updated its rates in October 2024. You can view the full document here.
Overview of the new rates
Visa’s latest interchange update, effective October 2024, reflects subtle but important adjustments across card types and transaction categories. As expected, rates vary based on merchant category, payment method (card-present vs. card-not-present), and card type (regulated, exempt, prepaid, and commercial).
Card-present debit transactions at supermarkets remain among the lowest-cost scenarios. For example, Visa’s interchange fee for exempt debit cards at supermarkets is a flat $0.30, while regulated debit cards are even lower at 0.05% + $0.21 per transaction.
By contrast, eCommerce and small-ticket transactions carry higher rates. Online (card-not-present) debit transactions for exempt cards are 1.65% + $0.15, and small-ticket debit purchases—often used for low-value items—are charged at 1.55% + $0.041. These higher rates reflect the increased risk and cost of processing associated with remote or micro-transactions.
On the credit card side, interchange rates differ more widely based on the type of card, transaction method, and merchant category. While some categories like charities benefit from lower rates (e.g., 1.35% + $0.05), other everyday sectors—such as restaurants and travel—face higher fees.
For example, card-present restaurant transactions on Visa consumer credit cards are typically charged 2.60% (minimum $0.04) for most card types, reflecting the higher average ticket size and potential for tips or adjustments.
Card-not-present transactions cost more as well, with standard eCommerce credit purchases reaching 2.40% to 2.60% + $0.10, depending on the product and card tier.
Comparison with Previous Years
How does Visa’s latest interchange update compare to its previous release? Looking at Visa’s April 2024 update, the October 2024 adjustments are relatively subtle.
Rates for most card-present debit transactions remain unchanged. For example, supermarket debit rates stayed flat at $0.30 (exempt) and 0.05% + $0.21 (regulated). Likewise, small-ticket and restaurant debit fees remained consistent, suggesting that Visa maintains stability in every day, high-volume use cases.
Changes are more visible in documentation and categorization. Visa continues to emphasize detailed breakdowns of regulated vs. exempt cards and card-present vs. not-present transactions, as well as small merchant programs. These distinctions give merchants more clarity—and potential levers to control processing costs.
How to Navigate Interchange Rates
Interchange rates—regardless of whether set by Visa, Mastercard, or any other card network—are outside merchants’ control.
Now, you may not be able to lower or negotiate interchange fees, but there are steps you can take to manage your overall payment processing costs.
Choose the right payment processor
Not all payment processors are created equal—and the pricing model they use can significantly impact your bottom line. Some providers use tiered or blended pricing models, which group transactions into vague categories (like “qualified” or “non-qualified”) without clearly showing you the underlying costs. While these models may seem simple, they often mask the true interchange fees and lead to higher overall costs.
A more transparent alternative is interchange-plus pricing, where the processor simply adds a fixed markup on top of the published interchange rate. Providers like Payment Depot offer this model, giving you greater visibility into what you’re paying and why.
Even better? Consider a subscription-based processor like Stax, which charges a flat monthly fee and zero markup on interchange. This model is particularly beneficial for growing merchants, as you keep more of your sales as volume increases. By choosing the right processor and pricing model, you can take more control over your payment costs—without sacrificing simplicity or scalability.
Train your staff in transaction optimization
Your team plays a crucial role in minimizing processing fees. One of the easiest ways to save is by ensuring that transactions are conducted in the most cost-efficient way possible. This means encouraging staff to accept payments via chip, tap, or swipe rather than manually keying in card details, which often results in higher interchange rates due to increased fraud risk.
When you train your team on best practices for in-person and online payments, you reduce the chances of triggering higher fees unnecessarily. Over time, even minor adjustments in how transactions are processed can lead to big savings—especially in high-volume environments.
Consider surcharging
If you want to offset the cost of credit card processing entirely, surcharging might be the solution. With surcharging, merchants add a small fee to credit card transactions to cover the associated processing costs—effectively passing the fee to the customer.
This is where CardX by Stax comes in. CardX provides a turnkey, fully compliant surcharging solution that makes it easy to implement and manage a surcharge program across your storefront or online checkout.
The platform ensures you stay within legal and card network rules while offering a seamless customer experience.
When used thoughtfully, surcharging can be a powerful way to preserve margins, especially for merchants in industries with tight pricing structures or frequent credit card use.
Educate yourself and stay informed on interchange fee updates
Interchange fees may be out of your control, but staying informed puts you in a better position to respond strategically. As mentioned above, card networks like Visa and Mastercard update their rates semiannually, and certain changes could impact your effective rate depending on your transaction mix.
Make it a habit to review rate schedules, stay connected with your processor, and consult with your accountant or finance team regularly. Also, consider following trusted fintech blogs or merchant advocacy groups that break down updates in plain English.
The more you understand the “why” behind your fees, the better equipped you are to make decisions about your payment strategy—whether that means negotiating processor terms, adjusting your pricing model, or training your staff to optimize transactions.
Conclusion
Interchange fees will fluctuate—that’s a fact. But there are plenty of options available to merchants to help reduce the impact these new fees will have on their profit margins. Talk to Stax today to find out how much we can help you save on payment processing fees.
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