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Customer Service: 
Some business owners are passionate about accounting and they enjoy getting into the nitty-gritty of policy. Other business owners need to hire accountants to make sure their businesses stay on the straight and narrow. Wherever you fall in the continuum between these two approaches, if you own a business, you need to understand exactly how money processing happens. This will help you avoid unpleasant surprises.
WHAT IS INTERCHANGE?
When a customer makes a purchase with you using a card, the bank who gave the customer the card (the issuer) pays you the amount owed. After that, the issuer collects the same amount from the customer’s funds and the transaction is complete. As the merchant, you end up paying the issuer an interchange fee for this service. It doesn’t matter what system you use; you’ll be paying interchange fees if you want to accept card payments.
WHY IS INTERCHANGE IMPORTANT?
- When a charge is converted into a cash deposit into your merchant account, your back will assess fees for billing services, fraud risk, credit risk, and float. Interchange fees cover all of this at once, which minimizes hassle for you as a merchant.
- Interchange stimulates growth of card issuers by giving them financial motivation and protecting them risk.
- Interchange opens up the field for a wide range of merchants by making tailored interchange programs available. By this, we mean small transactions get a lower interchange fee, which makes it possible for merchants to accept small card payments.
At Impact Pay System, we are dedicated to making it easy to run your business. We understand the challenges of being a merchant, and we are passionate about being a close, dependable ally for you. Check out our next blog to learn more about interchange and our credit card processing for small business.
