How Does Interchange Optimization Help My Business?

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What is Interchange?

Being able to accept credit cards is a vital part of a merchants’ business today, and there is a cost associated with doing so. The cost of running a credit card, known as interchange, is passed by the card brands. Interchange fees have a direct correlation with how cards are being accepted. To be sure you are being charged the lowest rate possible, you want to make sure your transactions are optimizing.


How does Interchange Optimization Help My Business?

Interchange optimization means obtaining the best rates for business to business (B2B) or business to government (B2G) purchases by passing all information about each transaction. Some of these factors can include transaction size, processing method, card type, and merchant industry. For the best chance of achieving this optimization, you need to send as much data as possible to the card issuer. The reason behind this logic is fairly simple – the less information passed, the higher the risk the transaction becomes.


Do I Qualify for Interchange Optimization?

The first thing to ask yourself when reflecting on this question is what type of customers/clients you work with primarily. They need to be using B2B or B2G cards to qualify for interchange optimization. Next, the best way to ensure you are hitting Level 2/Level 3 rates is by using a gateway that supports it. If you are not sure, call your gateway to find out. Finally, you need to find out what type of pricing structure you are on. If you are on a flat rate, tiered rate, or billback, you may not be receiving the lowest rate possible. If your transactions are optimizing, the “interchange plus” pricing model, otherwise known as “cost plus,” would ensure you are getting the best rates.

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