Anyone who has tried to analyze their credit card processing statement knows that the whole system is very complicated. I am going to try to make the costs of certain cards easier to understand. First you need to know the basic cost of processing for the Processors is called Interchange paid to the card issuing bank. On top of that cost you pay network and Processor fees varying from .20% to more than 2% depending upon the Processor’s markups.
I will try to explain how Interchange rates are charged here so when a customer presents a card you will have an idea of the relative cost. There are 5 basic Visa classifications and 4 MasterCard MasterCard credit cards as follows:
- “Classic, Gold, Platimum & Prepaid” also cards with no identifying name. These are the cheapest to processes with an interchange rate of 1.42% (card present) for most businesses and represent about 33% of the Visa & MasterCard cards in circulation.
- “Infinite” this is a more expensive card to process with an interchange rate of 1.61% (card present) and represents about 20% of the Visa & MasterCard cards in circulations
- “Infinite Privilege” is the premium Visa card with an interchange rate of 2.06% (card present) and represents only about 2% of the Visa cards in circulation
- “Business, Corporate, Purchasing and Commercial Prepaid” an Interchange rate of 1.9% for most businesses.
- “Infinite Business” is a rewards business card having an Interchange rate of 2.1% for most businesses.
- “Core & Prepaid” cards generally do not have any identification as to what type of card they are. These are the cheapest to processes with an interchange rate of 1.44% (card present) for most businesses and represent about 26.5% of the Visa & MasterCard cards in circulation.
- “World” cards have the word “World” on them with an interchange rate of 1.71% (card present) and represent about 8% of the Visa MasterCard cards in circulation.
- “World Elite” cards have an Interchange rate of 2.06% (card present) and represent about 1% of the Visa & MasterCards in circulation.
- “Commercial” cards have an Interchange rate of 2.00% (card present).
The above will give you a basic idea of the cost of specific cards watch for “Infinite Privilege, World Elite and any Business/Commercial cards they cost the most. Also don’t forget that the rates go up when the card is not swiped, tapped or inserted (card not present) into a credit card terminal even online payment. For example a “World Elite” card when not present costs 2.79% plus network fees and your processor’s markup.
*note some cards have proprietary names like “Preferred” that do not relate to the classification of the card look for the names above.
About Debit cards
Originally all debit cards were issued as “Interac” cards and processed though the Interac network. Currently most of the banks are issuing either Visa or MasterCard debit cards, for card present transactions they are still processed through the Interac network but the Visa and MasterCard debit cards can be used like a credit card online or over the phone. The cost for Visa and MasterCard online debit card transactions has an Interchange fee starting at 1.15% plus processor markups and network fees.