Article

Interchange Fee Breakdown

 

If you process debit or credit card payments, you pay interchange fees. Have you ever wondered how this fee is determined and what exactly you are paying for? We thought we would explain the breakdown of Bambora's interchange fees for card not present transactions in Canada.

The fees we are breaking down today is the 2.8% + $0.30 per transaction.

The 2.8% can be broken down into four parts:

  • Card Scheme Fee: The interchange fees provided by the card schemes, Visa or MasterCard. These are posted publically and start anywhere between 1.64 and 2.25 for card not present transactions.
  • Additional Card Scheme Fees: The ‘downgrades’ and ‘assessments’ published by the card schemes. For example, the additional charge imposed by Visa on a premium travel card that was used for the purchase, vs. a standard ‘basic’ visa credit card. All of those points have to be paid by someone! This also includes cross-border fees for any cards issued in a different country than the domicile of the merchant.
  • Acquiring Fees: The acquiring fees imposed by the acquirer. This is the fee to essentially use the rails through their host and reach the issuing bank in the transaction request.
  • Processor Fees: And finally, the fees charged by Bambora. These are the fees to access our system and plug into the acquirers and issuers to process transactions.

The $0.30 is the gateway fee. This is to access our gateway and portal. This helps to pay for all the free reporting, account tools, and statements.

The 2.8%+$0.30 is a blended rate. This blends the multiple fees for each card association into one, which gives merchants peace of mind knowing that they have the same consistent rate month to month.

More sophisticated merchants might consider an Interchange Plus (IC+) fee structure where they pay the interchange rates off their exact payment mix. The blended rate combines card types into one easy rate.

Interchange Plus will charge the merchant by card type and will fluctuate month to month based off usage. Merchants will be charged one fee for Visa, and another for MasterCard. IC+ can offer more competitive rates for those who know their monthly card type breakdown (eg. 55% Visa, 45% MasterCard), but most merchants like the comfort of one flat rate.

Do you need help deciding what fee structure is right for you? Let our team create the perfect blend for you.

Cookies

Bambora use cookies to give you the best possible experience when visiting our site.

Cookies are small text files that are stored on the visitors computer and are used to track what the visitor is doing on the website.  

There are two main types of cookies;

  1. A persistent cookie, which is stored on the visitors computer during a selected time.
  2. A session cookie, which is stored temporarily in the computer memory when the visitor is browsing the site. The session cookie disappears when you close your browser.

Bambora use cookies to:

  1. Improve the user experience of the site, by for example by adapting the site to reflect the visitors requirements, choices and interests.
  2. Provide information for web site statistics regarding the use of the site
  3. Follow advertisement in media to adapt our services to help you receive more relevant offers.

Bambora also use cookies from third-party providers. These are used mainly to analyse user behaviour with the purpose to improving user experience, and to offer more relevant advertising.

You can choose if you want to accept cookies.
If you do not want to accept the use of cookies, you can adjust the system settings in your browser. Certain functionality can only be used if your browser allows cookies.

We are open for business!

Welcome to the world of payment solutions. Choose your country and start accepting payments from customers all over the world.