What is the difference between interchange and my processing rate?

Interchange is the wholesale fee set by Visa/Mastercard and paid to the card-issuing bank. Your processing rate includes interchange plus assessments plus your processor's markup.

Updated February 2026 • Official Visa & Mastercard Data

Credit Card Processing Rates
Explained: And How to Pay Less

Q: How do I know if my processor is overcharging me?

Without a forensic audit, it's nearly impossible. Only by comparing every transaction's actual interchange rate against what your processor charged can you identify the padding.

Credit card processing rates, the interchange fees, assessments, and markups you pay every time you accept a card, are the single largest cost most merchants never examine. This is the complete guide.

Written by Robert L. Day

More Than a Decade as an Executive at Fifth Third Processing Solutions, later Vantiv and Worldpay, now part of Global Payments, the world’s largest card processor • Forbes Business Council Member • Entrepreneur Contributor • Vistage Speaker • Author of The Great American Heist

Robert has spent 15+ years conducting forensic audits of credit card processing statements, exposing systematic overbilling across every major processor in America. He is the founder of weAudit.com, America’s #1 credit card processing auditing firm.

The Biggest Expense You’ve Never Examined

What Are Credit Card Processing Rates?

Every time your business accepts a credit or debit card, a transfer fee is paid to the bank that issued the customer’s card. This fee is called the interchange reimbursement fee, and it is set unilaterally by Visa and Mastercard, updated twice per year (April and October), and is completely non-negotiable.

Interchange fees are calculated as a percentage of the transaction amount plus a fixed per-transaction fee. For example, Visa’s CPS/Retail rate for a standard credit card is 1.51% + $0.10. On a $500 transaction, that’s $7.65, just in interchange, before any other fees are added.

Here’s what most merchants don’t understand: interchange is not one rate. Visa publishes over 300 different interchange categories. Mastercard publishes hundreds more. The rate you pay depends on three factors: the type of card used (rewards, corporate, debit), your merchant category code (retail, restaurant, ecommerce), and whether the card was physically present or keyed in.

When people talk about “credit card processing rates,” they’re usually referring to these interchange fees, the wholesale cost that makes up the bulk of what you pay. Understanding interchange is the first step to understanding what’s really happening on your merchant statement.

Follow The Money

Where Your Processing Fees Actually Go

Your total credit card processing rate, the “merchant discount rate” on your statement, is made up of three components. Interchange is by far the largest.

72%

Interchange

72%, Interchange · Paid to card-issuing banks. Fixed, but can be managed & reduced.

21%, Hidden Fees · Processor’s extra profit. Found and removed by auditing.

5%, Dues & Assessments · Paid to Visa / Mastercard networks. Fixed.

2%, Discount Rate · Processor’s disclosed profit. Where everyone looks, and the only negotiable piece.

Here’s the problem: merchants focus on the 2% discount rate because that’s the number their processor negotiates. But the discount rate is the smallest piece of the pie. The real money is in the other 98%, interchange that can be managed and reduced, hidden fees that shouldn’t exist, and assessments that are often inflated.

What are these hidden fees? They’re the made-up charges buried on pages 3 through 10 of your statement, fees with names like “Network & Processor Access Fee,” “Interchange Clearing Fee,” “Risk Assessment Fee,” “Regulatory Compliance Fee,” and dozens of others. Some are legitimate pass-through costs. Many are completely fabricated by your processor. Without a forensic audit comparing each line item against actual Visa and Mastercard published rates, there’s no way to tell the difference. We find that these hidden fees typically account for 21% of a merchant’s total processing cost, and they are 100% removable.

$172B

Total merchant fees paid in the U.S. annually

300+

Visa interchange rate categories

0.65%

Avg. interchange inflation by processors

Want to know exactly how much of your processing cost is inflated interchange vs. legitimate fees?

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The Uncomfortable Truth

Credit Card Processing Is an Unregulated Industry

Most business owners assume there’s a government body overseeing what credit card processors charge. There isn’t. The processing industry operates with virtually no regulatory oversight, which means processors can (and do) create fees from thin air.

“We also know the current interchange system is unregulated and uncompetitive. Small businesses and large businesses alike are being overcharged across America by credit card companies and banks, without restraint.”

, Senator Dick Durbin, U.S. Senate Floor, 2011

Senator Durbin’s words were spoken in 2011. Over a decade later, nothing has changed. Two of the world’s largest processors recently settled for $52 million over allegations of over-inflating interchange. The average markup we find in our audits? 0.65% above actual interchange, hidden in plain sight on your statement.

This means you can have the lowest discount rate your processor offers, your transactions can clear at the lowest interchange fees available, and you can still have one of the worst deals in the industry. Because the discount rate is only 12% of the story. The other 88% is where the real money is being taken.

The Bait and Switch

How You Can Have the Lowest Rate and the Worst Deal

Credit card processors know that merchants look at two things: (1) discount rates and (2) transaction fees. So they make those numbers look great, while padding everything else.

An average merchant statement runs four to ten pages per location and contains dozens of fees, more importantly, dozens of unregulated fees. These unregulated fees mean everything in the merchant processing world.

Here’s how the trap works: Your processor gives you a discount rate of 0.05%. Looks fantastic, right? But behind the scenes, they’re inflating the interchange they pass through by 0.65%. So your real discount rate is 0.70%, and you’d never know it by looking at the rate they quoted you.

Then come the fees with names you’ve never heard of: “Network & Processor Access Fee,” “Interchange Clearing Fee,” “Risk Assessment Fee.” Some are legitimate. Many are completely fabricated. Without a forensic audit, it’s impossible to tell the difference.

Think your rate is competitive? We’ll prove whether it is, free. Our forensic audit takes five minutes and reveals exactly where your money is going.

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Not All Cards Are Created Equal

Why the Card Type Determines Your Processing Rate

Rewards cards, the ones customers love, cost you more. A Visa Infinite card carries an interchange rate of 2.30% + $0.10 at retail, compared to 1.51% + $0.10 for a standard card. That’s a 52% difference on the same transaction. The banks fund those airline miles and cash back rewards with your money.

Debit cards are divided into two categories: Regulated (issued by banks with $10B+ in assets, capped at 0.05% + $0.21 by the Durbin Amendment) and Exempt (issued by smaller banks, with higher rates like 0.80% + $0.15 at retail). The card-issuing bank’s asset size determines which rate applies.

The B2B Processing Tax

Why B2B Transactions Cost You More, And How to Fix It

If your business accepts corporate purchasing cards, you’re likely paying 25–40% more in interchange than you need to. Business-to-business transactions are automatically downgraded to the highest rate categories unless you submit enhanced data, known as Level II and Level III processing.

Level I (standard) sends only the transaction amount and date. Level II adds tax amount, customer code, and merchant postal code. Level III adds full line-item detail, SKUs, descriptions, quantities, unit prices. Each level of data you send qualifies you for lower interchange rates.

Starting April 2026, Visa is sunsetting the Level II program entirely in favor of its new Commercial Enhanced Data Program (CEDP). Merchants who don’t upgrade to Level III-quality data will see their B2B rates increase significantly.

The difference between a Standard (non-qualified) corporate card rate of 3.15% + $0.10 and a Level III rate of 1.75% + $0.10 is massive. On $1 million in B2B volume, that’s $14,000 in annual savings, just by sending better data.

Silent Profit Killers

Common Causes of Interchange Downgrades

A “downgrade” happens when a transaction fails to meet qualification criteria and gets bumped to a higher-cost interchange category. Here are the most common triggers:

Late settlement, Not batching within 24 hours of authorization

Missing AVS data, Not sending address verification on card-not-present transactions

No CVV, Failing to capture the security code for ecommerce orders

Keyed-in transactions, Manually entering card data when a chip reader is available

Missing Level II/III data, Corporate cards without enhanced data fields automatically downgrade

Wrong MCC code, An incorrectly assigned merchant category code can disqualify you from industry-specific rates

Each downgrade can add 0.50% to 1.50% to the interchange rate on that transaction. Over a year, downgrades on just 10% of your volume can cost tens of thousands of dollars.

Downgrades hiding on your statement? Our forensic audit catches every single one, and shows you how to eliminate them.

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Official Visa Data · Effective October 18, 2025

Visa U.S.A. Credit Card Processing Rates

Important: The rates shown below represent the most common interchange categories that apply to the majority of merchants. Visa publishes over 300 categories total, covering specialized programs, performance tiers, and niche merchant codes. For the complete and official list, please visit Visa’s Interchange Reimbursement Fees page.

Consumer Credit, Card Present

Category	Visa Infinite	Visa Signature	Traditional Rewards	All Other
Retail (Threshold III)	2.30% + $0.10	1.65% + $0.10	1.51% + $0.10	1.51% + $0.10
Supermarket (Tier 0)	1.65% + $0.05	1.55% + $0.05	1.18% + $0.05	1.18% + $0.05
Restaurant	2.60% (min $0.04)	2.60% (min $0.04)	2.10% (min $0.04)	2.10% (min $0.04)
Fuel	1.15% + $0.25 ($1.10 cap)	same	same	same
Non-Qualified (EIRF)	3.15% + $0.10	same	same	same

Consumer Debit, Card Present

Category	Exempt (Small Bank)	Regulated ($10B+)
Retail	0.80% + $0.15	0.05% + $0.21
Supermarket	$0.30 flat	0.05% + $0.21
Restaurant	1.19% + $0.10	0.05% + $0.21
eCommerce Basic	1.65% + $0.15	0.05% + $0.21

Official Mastercard Data · Effective April 11, 2025

Mastercard U.S. Credit Card Processing Rates

Important: The rates shown below represent the most common interchange categories for Mastercard transactions. Mastercard publishes hundreds of additional categories covering commercial cards, tiered volume programs, and specialty merchant codes. For the complete and official list, please visit Mastercard’s Interchange Rates page.

Consumer Credit

Category	Core	World	World Elite
Merit III Base (Retail)	1.65% + $0.10	1.90% + $0.10	2.30% + $0.10
Supermarket Base	1.45% + $0.10	1.70% + $0.10	2.10% + $0.10
Restaurant	N/A	1.85% + $0.10	2.00% + $0.10
eCommerce (Full UCAF)	1.95% + $0.10	2.20% + $0.10	2.60% + $0.10
Standard (Non-Qualified)	3.15% + $0.10	3.15% + $0.10	3.15% + $0.10

Consumer Debit (Unregulated)

Category	Debit	Prepaid
Merit III Base (Retail)	1.05% + $0.15	1.15% + $0.15
Supermarket Base	1.05% + $0.15 ($0.35 max)	same
Restaurant	1.19% + $0.10	1.19% + $0.10
Regulated (all)	0.05% + $0.21	0.05% + $0.21

Seeing rates on your statement that are higher than these published rates? That’s inflated interchange, and it’s costing you thousands.

Expose Hidden Fees

Frequently Asked Questions

Credit Card Processing Rates FAQ

You cannot negotiate interchange rates, those are set by Visa and Mastercard. What you can negotiate is your processor’s markup, which is typically only 12% of your total cost. The real savings come from ensuring your transactions qualify for the lowest interchange categories, eliminating downgrades, and making sure your processor isn’t inflating the pass-through rates.

Interchange is the wholesale fee set by Visa/Mastercard and paid to the card-issuing bank. Your “processing rate” (or merchant discount rate) includes interchange, plus Visa/Mastercard assessments, plus your processor’s markup. On an interchange-plus pricing model, you see each component. On bundled pricing, it’s all hidden in one rate, which is how processors disguise inflated costs.

Visa and Mastercard update their interchange rate schedules twice per year, in April and October. However, your processor can change their markup and fees at any time, and many do so without notification. This is why regular audits are critical.

A downgrade occurs when a transaction doesn’t meet Visa or Mastercard’s qualification criteria for a given interchange category, causing it to fall to a more expensive rate. Common causes include late batch settlement, missing AVS/CVV data, manually keyed transactions, and missing Level II/III data on B2B cards. Each downgrade can add 0.50% to 1.50% to that transaction’s cost.

Level II and Level III refer to the amount of transaction data sent with each payment. Level I is basic (date, amount). Level II adds tax and customer code. Level III adds full line-item detail (SKUs, quantities, prices). Sending more data qualifies B2B transactions for significantly lower interchange rates, potentially saving 1.0% to 1.4% per transaction. Starting April 2026, Visa is sunsetting Level II in favor of its CEDP program.

Without a forensic audit, it’s nearly impossible. The most common overcharge method, inflated interchange, looks exactly like a legitimate pass-through rate on your statement. Only by comparing every transaction’s actual interchange rate against what your processor charged can you identify the padding. That’s what weAudit.com does: we compare line-by-line, fee-by-fee, and show you exactly what’s being taken.

The average total processing rate for U.S. merchants in 2026 is approximately 2.24% for credit cards and 1.17% for debit cards. However, averages are misleading, your actual rate depends on your industry, card mix, transaction methods, and processor markup. A restaurant accepting mostly rewards cards will pay significantly more than a grocery store processing mostly debit.

Find Out What You’re Really Paying

A free forensic audit of your processing statements reveals exactly where your money is going, interchange, hidden fees, downgrades, and all. Five minutes. Zero cost. Zero obligation.

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About this page. Interchange rate data is sourced from the official Visa and Mastercard published rate schedules. Rates change twice a year, in April and October. This page is for information only and is not advice about your specific processing agreement.

Published by weAudit. If you want your own statements checked against these rates, book a call or read how our audit works.