A Complete Guide to Visa Interchange Rates and Pass-Through Fees

Visa is the most popular credit card network in the United States. Visa controls close to half the credit card market, as it has more relationships with partner banks than other cards.

Each Visa card features a different interchange rate. The rate is the wholesale cost that a processor pays for each card transaction it manages.

These cards also have various pass-through fees to consider. These charges can influence what a business will earn through each credit card transaction it processes.

The Basic Interchange Rates

The standard interchange rates from Visa go from 1.65% to 2.3% plus 10 cents for each swiped transaction. The rate is the basic total for most deals, although it can change surrounding your line of work.

Changes In Industries

Visa issues different interchange rates for various industries. It imposes rates based on the risk factors associated with each industry. Those subject to more chargebacks or potential returns will experience higher rates.

For example, a fuel purchase will feature an interchange rate of 1.15% plus 25 cents with a maximum of $1.10 for each purchase. A supermarket will have an interchange rate of 1.65% plus 5 cents on average.

A travel purchase will have a rate of 2.25% plus 10 cents. The travel cost will have a higher rate due to the risk of someone requiring a refund for something one does not use.

Keyed Transactions Cost More

All keyed transactions with Visa will cost more due to the added fraud risk. A keyed transaction can include a rate from 1.8% to 3% plus 10 cents.

Debit Transactions Cost Less

The Visa interchange rates for debit cards are lower than they are for credit cards. A debit card accesses funds through a bank, meaning the customer has the money needed to pay for the transaction. The risk of a customer being unable to pay for something is reduced, thus producing a lower interchange rate.

A Visa debit card will have an average interchange rate of 0.8% plus 15 cents. Keyed transactions will have a rate of 1.65% plus 15 cents.

Some debit transactions come from prepaid cards. These are cards people can purchase and send to others through various platforms. A prepaid card will have a higher rate of 1.15% plus 15 cents. The added rate comes from the customer potentially not having enough money on a prepaid card to cover an entire transaction. The customer might have to finish the transaction through a separate card. You would still cover the higher rate for a credit card that covers the remainder of the transaction if the customer uses one to finish the transaction.

Higher Rates For Business Cards

Visa also offers business and corporate cards available for businesses that need to cover their purchases. These business cards come with benefits like companies getting multiple cards that link to one account, purchase rules and restrictions, and advance reporting functions. Some cards will also feature extra rewards like points for gas and travel purchases. Cashback deals may also be available through some services.

A Visa Business card will feature a higher interchange rate. The rate will be around 2.2% plus 10 cents on average. Some corporate cards may also go up to 2.5% plus 10 cents.

Visa Purchasing cards have high rates at 2.5% plus 10 cents. A Purchasing card allows businesses to make electronic payments on many business expenses through the current credit card network.

Assorted Pass-Through Fees

You will also find many pass-through fees with each transaction. These include a fee Visa processes for running its network. Some additional charges may also work for international payments. Here are a few of the more common pass-through fees you will experience while on the Visa network:

  • Visa processing fee – 0.14%
  • Clearing access charge – 0.25 cents to access a card before it can enter the Visa network
  • Network Acquirer Processing Fee – 1.95 cents
  • Cross-border fee – 0.8% for when a purchase is made with a card that was issued outside the United States
  • Zero amount verification fee – 2.5 cents for credit and debit verification requests; the fee will increase to 3 cents for debit and 3.5 cents for credit in 2021
  • Zero floor limit fee – 20 cents per item for a settled transaction that cannot be matched with a past authorization

Visa plans on introducing some other pass-through fees in 2021 and 2022. A Decline Transaction Resubmission Fee will be for all transactions and will charge a retailer for cases where a transaction cannot go through a network as planned. The value of that fee is unknown at this time.

Fixed Acquirer Network Fee

All businesses must also spend a FANF or fixed acquirer network fee each month. Visa charges this fee to merchants who wish to access the Visa network. The charge can range from $1.25 to $300,000 or more per month. The total will vary surrounding how much money the merchant processes each month, how many locations it operates, and the volume of transactions it processes.

A small business with one or two locations will pay somewhere close to the bottom of that range. But a massive multi-national entity could spend hundreds of thousands of dollars a month for the right to accept Visa payments.

The General Considerations to Note

The interchange rates you will manage when accepting Visa credit card payments will vary surrounding many factors. These points are worth exploring when looking at a good deal on whatever cards you want to accept:

  • Your industry of operation
  • The size of your business
  • Whether someone swipes or keys in a card
  • Whether the card is in a reward program
  • The level of the card, including if it is a business or Purchasing card
  • Whether a person is using a credit or debit card

Be aware of what cards you’re accepting when handling payments with Visa credit cards. Visa provides many useful cards for various purposes, with some cards coming with rewards. But you will spend different interchange rates over whatever is open.

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