Interchange rates are the underlying credit card processing costs associated with the transfer of funds between the credit card processor and the bank that issued the credit card used by your customer. There are hundreds of different Interchange categories. Each of these categories applies to the type of card being accepted and the method used to process the credit card. If you are reviewing your credit card processing statement and you see the letters “EIRF”, take note.

When a transaction falls into a more expensive interchange category it is referred to as a “downgrade”. Downgrades and the associated higher rates are something that all merchants want to avoid. Major credit card organizations, such as Visa, Discover Card and MasterCard, maintain Interchange Downgrade rates for both credit card and debit card transactions that fail to meet the requirements for the transaction to clear at the card’s correct Interchange Rate. Interchange Rates that are downgraded are higher than the normal Interchange fee.