Most processors use the term "Enhanced Billing" when they charge a low “Discount Rate” then surcharge (over-inflate) the actual interchange rate. If a merchant doesn't have a working knowledge of the 1,000+ Interchange categories, this is impossible to detect (e.g. Data Rate II is 2.05% and not 2.95%).
This is a real example where the Visa EIRF Interchange was actually 0.76%. But when you divide $31,528.06 by $444.55, it comes out to 1.41%. Here, the processor is charging an additional 0.65% on top of Visa’s 0.76% Interchange rate. Meanwhile, the merchant thinks Visa is charging them 1.41%.
Worse still, the processor is rewarded for the merchant’s mistakes. Processors make additional profit off of the merchant’s downgrades; therefore, the worse the merchant’s transactions clear, the more profit for the processor, the very people teaching them how to process.
Impossible to detect
Requires an audit to uncover
Uncovered on about 30% of audits
Found mostly on medium to large merchants