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Below are two simple examples which illustrate how interchange plus pricing often results in lower processing costs than discount pricing. Both examples assume a $100.00 transaction involving a Visa check card (debit card) for an e-commerce merchant.
Example 1: E-Commerce, Basic Debit
In this example, we assume that the transaction qualifies for the lowest interchange rate for Visa check cards which is 1.6% + $0.15 as of July 2009. We assume that this transaction would be processed at the qualified rate in the case of discount pricing.
Example 2: E-Commerce, EIRF Debit (downgrade)
In this example, we assume that the transaction is downgraded to the EIRF rate for Visa check cards which is 1.75% + $0.20 as of July 2009. EIRF stands for Electronic Interchange Reimbursement Fee. The key point to note is that EIRF transactions are treated as non-qualified transactions in the case of discount pricing merchant accounts. As a result, this example assumes a typical non-qualfied rate in the case of discount pricing.
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