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Visa Interchange Rates and Pass-Thru Fees: A Complete Guide

by Soft2share.com
pass-through pricing
pass-through pricing

Visa is a leading brand that offers a wide range of debit and credit cards for consumers to make a purchase accordingly. However, they collect interchange fees from merchants based on sales volume and transactions.
Many people refer to interchange as the “costs” involved in processing credit cards. You can’t negotiate these rates. They are set by the credit card companies and not the merchant service providers. It can vary by the type of card used, the type of transaction, how the transaction is processed, and more. The pass-through fees are becoming popular over the years among merchants and complicated to understand them properly. They are fees assessed by a payment processing provider to a merchant and by the payment card networks to banks. At the same time, it is necessary to understand them in detail to help make a better decision.

Knowing more about pass-through pricing 

Pass-through pricing allows a merchant to get the actual cost of processing that passes directly through a business. Another thing is that it makes feasible ways to process transactions smoothly by addressing the essential needs. Moreover, it is possible to avoid high interchange rates which will help accomplish goals to a large extent. Apart from that, the pricing offers transparency of details to a merchant that will help grow business in the markets. 

What are the components of credit card processing?

Anyone who wants to know more about Visa pass-through pricing should understand the components involved in credit card processing. 

Interchange fees 

Interchange fees involve a percentage of the total transaction amount plus a static amount and a merchant has to pay the same when a customer swipes a credit card. Several factors will determine the interchange fees and merchants should be aware of them in detail.


Many merchants think that Visa makes money through interchange fees and it is not true. It gets revenues by charging assessment fees while accepting a credit card or debit card. At the same time, some assessments apply only for a specific type of transaction while others apply to all transactions. 

Both interchange fees and assessments will determine the entire cost of credit card processing. 

Processor’s markup 

It is the fee calculated based on the base costs of interchange rates and assessments. At the same time, the costs may vary from one processor to another processor. The processor’s markup plays an important role in determining a pricing model with base rates. However, it is imperative to choose a model which exactly suits the needs of a merchant. 

The advantages of pass-through merchant pricing

The primary advantage of pass-through merchant pricing is that it lets merchants pay less when the interchange rates are low. A merchant can avoid lumping all transactions together with a single fee or pricing model. Besides that, it allows merchants to evaluate the exact margin made by a provider from an account. 

Knowing the latest updates of Visa interchange fees and pass-through fees

Anyone who wants to know the latest updates of Visa interchange fees and pass-through fees can search for the details online. This, in turn, gives ways to select a tier or pricing plan which fits the operations of a business. Merchants can even find the lowest cost option with the pricing structure that will help accomplish goals in a business with high success rates. 

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