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An INSIDE Analysis of Credit Card Processing and the Payment Industry
Understanding the Payment Industry is a tough task. Merchants are faced with confusing statements, hundreds of various payment processing fees, and numerous processing options offered by Merchant Service Providers, Payment Gateways, and other payment processing entities. The PAYMENTINSIDER provides articles, posts, and whitepapers on the Payment Industry, including this article, Payment Processing Downgrades, with the goal of creating transparency in this marketplace.

Payment Processing Downgrades

The Visa, MasterCard, and Discover Card Associations all maintain Interchange Downgrade rates for credit and debit card transactions that do not meet the requirments for the transaction to clear at the card type’s correct Interchange Rate. Downgraded Interchange Rates are higher than the card’s normal Interchange Fee, so it’s always in a merchant’s best interest to avoid downgrades whenever possible. Always clearing transactions at the correct Interchange, and avoiding downgrades allows merchants to obtain the lowest possible processing costs. Interchange Plus Pricing passing through the wholesale Interchange Rates and Fees, and allows merchants to work with VeriProcess to identify and eliminate downgrades – through a payment audit – thus lowering card acceptance costs.

EIRF (Electronic Interchange Reimbursement Fee) and Standard are two of the most common Visa and MasterCard Interchange Downgrades. They can be applied to both card present and card not present credit, debit, and prepaid card transactions. The EIRF rate is applied to card transactions that are either missing compliance data elements or are settled within 2 days of authorization. Standard is applied to card transactions that are not settled within the card association’s specified timeframe or missing some data elements.


VeriProcess will help you avoid these downgrades and the resulting higher interchange fees by Auditing your processing and identifying areas for Processing Optimization.

Payment Topic: Merchant Services
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