What are the different types of interchange fees?

Interchange fees are the fees that merchants are required to pay to the credit card issuer for processing credit card transactions. In Texas, this fee is regulated under the state’s Credit Card Law, which sets a number of rules and regulations for how credit card companies and merchants can interact. Interchange fees can be categorized into three different types: Qualified, Non-Qualified, and Mid-Qualified. Qualified interchange fees are the lowest fees, and are charged when the card being used has the most secure payment technology. Non-Qualified fees are slightly higher, and are charged when the card being used has less-secure payment technology, such as magnetic stripe cards that can be easily skimmed. Mid-Qualified fees are charged when the card being used has a mix of secure and less-secure technologies. In addition to the three basic types of interchange fees, additional tiers of fees can be charged for specialized services, such as international business transactions or purchases that involve rewards points. Merchants may also be charged different rates for different types of cards. For example, they may pay higher fees for corporate cards, or for cards that offer rewards points. Overall, the amount that merchants are charged for interchange fees can vary significantly based on the type of card being used and the type of transaction being processed. It is important for merchants to understand what fees will be charged and how those fees are calculated in order to make sure they are adequately covering their costs.

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What are the different types of interchange fees?

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