Myth vs. Fact

Myth vs. Fact

Merchants in the interchange debate continue to make outlandish and unsubstantiated claims about interchange fees and the electronic payments system — statements that are misleading, opportunistic, and outright false.

Myth #1

FACT: Merchants can — and do — directly negotiate with the networks to lower their interchange costs through a variety of incentive arrangements with networks, including deals in which the savings are rebated to the merchant. Some merchants prefer to handle the negotiation through their association or other group arrangement. Entire categories of merchants have obtained lower interchange rates based on their particular business needs.

  • For example, Visa and MasterCard capped interchange on gasoline sales and established lower interchange rates for categories of merchants such as grocery stores, utilities and convenience purchases. Also, merchants routinely switch processors for a better package and price — and therefore have a much greater ability to negotiate card acceptance costs than they do for most other business services, such as electricity, postage, water, or trash collection.

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